‘Strong & comprehensive budget could strengthen rand’

Gordhan is expected to announce bold steps for SA to avoid a possible downgrade to junk status & a recession.

Finance Minister Pravin Gordhan. Picture: Reinart Toerien/EWN.

JOHANNESBURG - Economists say a strong and comprehensive budget by Finance Minister Pravin Gordhan could further strengthen the rand.

The rand hit a two-month high of R15,06 against the dollar yesterday, before weakening to R15,23.

At its worst, the rand traded briefly at around 18 to the dollar earlier this year.

Just a few hours away from what's being described as the "most important Budget speech in post-apartheid South Africa", the rand continues trade cautiously against the dollar.

Nedbank economist Isaac Matshego says the government's ability to cut spending, privatise State-owned entities and keep debt in check could provide further support to the local currency.

"That support could be short lived depending on what the government intends to do."

Faced with a slow global economy, Gordhan is this afternoon expected to announce bold steps for South Africa to avoid a possible downgrade to junk status and a recession.