South Africa's rand softer ahead of medium term budget speech - CNBC Africa

South Africa's rand softer ahead of medium term budget speech

Southern Africa

by Reuters 0

South Africa's rand was slightly softer against the dollar on Wednesday. Photo: Wikimedia

South Africa's rand was slightly softer against the dollar on Wednesday as the market awaited the finance minister's medium term budget statement, which analysts expect to show little change in this year's deficit forecast.

The JSE securities exchange's Top-40 futures index ticked up 0.35 percent, suggesting the local bourse would open 168 points higher at 0700 GMT.

At 0649 GMT, the rand was changing hands at 13.3425 versus the dollar, down 0.3 percent from Tuesday's close.

All eyes are on the budget speech, set for 1200 GMT. Finance Minister Nhlanhla Nene is likely to target a budget deficit of 3.8 percent of gross domestic product for 2015/16, in line with his February forecast of 3.9 percent.

Analysts and investors are also keen to see whether the medium term budget policy statement (MTBPS) has any details on South Africa's proposed multi-billion rand nuclear energy programme.

"There is no chance this country can afford a deal that will cost the National Treasury almost 1 trillion rand and so it is with slightly nervous bated breath that we await the release," Standard Bank trader Warrick Butler said.

Domestic inflation data due out at 0800 GMT and retail sales numbers expected at 1100 GMT might also influence the currency, traders said.

Government bonds also weakened in early trade, with the

yield for 2026 benchmark debt adding 3.5 basis points to 8.305 percent.

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