Rand hit by debt concerns after Mboweni asks for mini budget postponement

The rand shed about 0.7% after finance minister Tito Mboweni asked parliament on Tuesday to postpone the budget by a week.
The rand shed about 0.7% after finance minister Tito Mboweni asked parliament on Tuesday to postpone the budget by a week.
Image: Kopano Tlape / GCIS

Renewed worries about SA's bloated debt levels put the rand among the worst-performing EMEA currencies on Wednesday, while emerging market stocks fell as another Covid-19 vaccine delay hurt demand for risk-linked assets.

The rand shed about 0.7% after finance minister Tito Mboweni asked parliament on Tuesday to postpone the budget by a week and advisors to President Cyril Ramaphosa said government plans to curb rising debt were too ambitious.

The South African economy was in recession before the coronavirus pandemic and its strict lockdown has worsened the situation.

South African equities were a touch higher.

The MSCI index of emerging market stocks fell about 0.2%, tracking overnight weakness in Wall Street after further halts to vaccine trials and a snag in new stimulus talks hurt risk appetite.

Most stock markets have staged speedy recoveries from pandemic-driven lows as ultra-low interest rates around the globe have pushed investors into higher-yielding equities.

"The technical picture of most stock indices, especially the U.S. ones, remains relatively positive, which means that yesterday's retreat may be an opportunity for some buyers to jump back into the action," Charalambos Pissouros Senior Market Analyst at JFD Group wrote in a note.

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