(Updates rand , adds bonds and stocks)
JOHANNESBURG, Feb 25 (Reuters) - South Africa's rand fell on Thursday, giving up the previous session's gains when Finance Minister Tito Mboweni's budget speech reassured some investors the country could avoid a full-scale fiscal crisis.
At 1735 GMT, the rand ZAR=D3 was 2.38% weaker at 14.8450 per dollar, far off the 13-month high of 14.3950 it hit on Wednesday.
Government bonds also weakened and the yield on the instrument due in 2030 ZAR2030= jumped 18 basis points to 9.0%.
Mboweni announced up to 19.3 billion rand ($1.31 billion) of spending on coronavirus vaccines and forecast a deficit of 14% of gross domestic product this fiscal year, while repeating promises to cut expenditure. Treasury also announced a steep reduction in debt issuance in the local market after leaning heavily on investors for short-term cash in 2020 to fund the revenue shortfall triggered by COVID-19.
But not all investors were enthusiastic about the economic recovery path painted by the budget.
Fitch, one of three major credit ratings firms to rank South Africa in subinvestment, said the country still faced "severe challenges" to implementing fiscal consolidation. more favourable projections mean that further rating downgrades might be off the agenda for now. It is impossible to overlook though that public finances remain extremely difficult not least due to the weak growth prospects," said Commerzbank (DE: CBKG )'s FX and EM analyst Elisabeth Andreae.
Stocks closed higher, led by miners.
Johannesburg-listed shares of Anglo American (JO: AMSJ ) AGLJ.J rose 7.3% after the company beat forecasts with a small fall in 2020 earnings and boosted its dividend. in Impala Platinum (Implats) IMPJ.J were up 7.16% after it said it was looking to boost its output after posting a four-fold jump in half-year profits and raising its interim dividend. Top-40 .JTOPI index rose 2.17% to 62,063 and the broader all-share .JALSH closed 1.94% higher at 67,483. ($1 = 14.7889 rand)
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.