JOHANNESBURG (Reuters) – South Africa’s rand traded in a narrow range against the dollar on Monday, with domestic focus firmly on Finance Minister Nhlanhla Nene’s medium term budget statement for an update on the health of the economy.
Nene is likely to cut the GDP growth forecast for 2014, largely due to crippling wage strikes earlier in the year, and will probably predict a wider budget deficit than seen in February.
The rand was at 11.0780 versus the dollar at 0646 GMT, little changed from Friday’s close at 11.0800.
Government debt was also largely flat, with the yield for the paper due in 2026 – the benchmark for the secondary market – quoted flat at 8.115 percent.
In addition to Nene’s speech, which was likely to give clues on possible changes to the government’s borrowing plans, CPI inflation data also due out on Wednesday would provide guidance on the outlook for interest rates, analysts said.
The market tends to expect the worst and then rally after the speech as the minister always manages to present an upbeat story, RMB analyst Deon Kohlmeyer said.