SA billionaire Patrice Motsepe

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Budget 2021: Rand value plunges during Mboweni’s speech

The South African Rand began on the back foot ahead of the budget speech this week. Here’s how the ZAR fluctuated during Tito Mboweni’s 2021 budget speech.

SA billionaire Patrice Motsepe

Image via Adobe Stock

Finance minister Tito Mboweni delivered the 2021 budget speech on Wednesday 24 February 2021. As expected, the Rand value fluctuated before, during and after his speech.

This follows after the Rand fell on Monday 22 February. As of Friday, the Rand traded at R14.7775 against the U.S. dollar, which according to Bloomberg, was 0.56% weaker than its close on Friday.

Budget speech 2021

Rand fluctuations during Mboweni’s address

As can be seen from the graph below, the Rand was R14.5519 to the Dollar at 13:55 South African Standard Time (SAST), five minutes before Mboweni’s 14:00 speech.

budget speech tito mboweni rand zar
Image via tradingeconomics.com

During the speech, Mboweni detailed how treasury would be spending our money in 2021. A recap of the speech can be viewed here. Brace yourselves, though, the price of alcohol increased with immediate effect.

The Rand reached its lowest point at 14:25 SAST when according to Trading Economics, it was at R14.4054. Half way through Mboweni’s address, the Rand stood at R14.4258.

budget speech tito mboweni rand zar
Image via tradingeconomics.com
budget speech tito mboweni rand zar
Image via tradingeconomics.com

Rest assured, the Rand was on an upwards spiral again by the time Mboweni wrapped up his speech, going strong at R14.4325 at 14:50 South African Standard Time (SAST).

“A Reuters poll forecast showed on Friday that South Africa’s consolidated fiscal deficit is expected to narrow this year because of an economic rebound, but the long-term trend of higher debt remains unchanged due to COVID-19 and pre-existing spending”.

budget speech tito mboweni rand zar
Image via tradingeconomics.com

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South Africa’s latest rand report

After a multi-week bull run, the Rand experienced a significant pull-back against developed currencies. The general bearish global tone limited further gains for emerging market currencies, according to Sable International.

After touching highs of R14.40 against the dollar, the USD/ZAR pair ended the week at R14.66. Equity markets ended mostly in the red, with the Johannesburg Stock Exchange (JSE) trading lower from previous record highs.

As predicted earlier this week, the ZAR began on the back foot ahead of the budget speech. However, yields have continued to climb, as 2030 bond yields rose above 9% – the highest yields seen this year.