JOHANNESBURG (Reuters) – The South African rand fell in early trade on Wednesday as political wrangling over the country’s contested budget continued and investors braced for U.S. President Donald Trump’s tariff plans later in the day.
At 0730 GMT, the rand traded at 18.57 against the dollar, roughly 0.3% weaker than its previous close.
The budget passed its first test in parliament on Tuesday, when the biggest party in the ruling coalition secured the support it needed despite lawmakers expressing reservations about some of its key revenue-generating measures.
But the African National Congress had to rely on a small party outside the coalition to approve the fiscal framework, angering its main coalition partner, the Democratic Alliance, which said it had crossed a “line in the sand”.
An opposition party has written to the speaker of parliament seeking to set aside Tuesday’s proceedings and block lawmakers from meeting on Wednesday to vote on the next stage of the budget process.
ETM Analytics said in a note that the rand’s weakness was mainly attributable to the fractious budget negotiations.
The dollar was marginally firmer on Wednesday as traders anxiously awaited the reciprocal tariffs Trump has promised to impose on countries that impose duties on U.S. goods.
South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 9.5 basis points to 9.2%.
(Reporting by Sfundo Parakozov; Editing by Alexander Winning and Joe Bavier)
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