The South African rand remained stable on Friday as investors awaited further details on a contentious national budget that has stirred volatility in domestic markets.
By 1236 GMT, the rand traded at 18.8125 against the dollar, nearly matching its Wednesday closing level of 18.81.
South Africa’s political parties have been at odds over a proposed 1 percentage point increase in the value-added tax (VAT) over the next two years. The proposal was withdrawn on Thursday, leaving domestic investors uncertain about the next steps in the budget process.
“The removal of the VAT increase, coupled with concerns over how the Treasury will address the budget shortfall, has placed some renewed pressure on the rand,” said Andre Cilliers, currency strategist at TreasuryONE.
Like other risk-sensitive currencies, the rand is influenced by both global factors and domestic issues. In addition to the budget uncertainty, the rand has faced fluctuations due to concerns over U.S. President Donald Trump’s tariff plans.
On the stock market, both the Top-40 index (.JTOPI) and the broader all-share index (.JALSH) were trading around 0.7% higher, while South Africa’s benchmark 2030 government bond saw a drop in yield, down 4 basis points to 8.83%.
