Related Articles
Top Stories
May 27 2012 11:21
There's a price war raging between South Africa's cellphone networks after Cell C lowered the rates of its prepaid calls by more than 34%.
May 28 2012 07:53
The City of Cape Town has spent R175m running the Myciti bus service since the Soccer World Cup compared to an income of R35m, a report says.
May 27 2012 13:09
The oversupply of golf estates has claimed another victim.
Johannesburg - The rand firmed 10 cents against the dollar on Wednesday afternoon after Finance Minister Pravin Gordhan delivered his maiden National Budget in parliament.
Financial services group Rand Merchant Bank described Gordhan's Budget as rand friendly, with no shift away from economic orthodoxy.
RMB analysts John Cairns and Nema Ramkhelawan noted that the South African Reserve Bank's (Sarb's) independence was reiterated, there was no mention of nationalisation, and inflation targeting remains intact.
Also, Gordhan said "we are agreed that we need a stable and competitive real exchange rate" but went on to say "in today's world this cannot be translated into a straightforward fixed price of the rand". Cairns and Ramkhelawan interpreted this as Gordhan dismissing the notion of the pegging of the currency.
While acknowledging that large capital inflows appreciate the currency, the speech noted that these inflows were required to sustain investment spending.
"There was not even the slightest hint that actions would be taken to try and stem these inflows - a fear that pervaded the markets prior to the
speech," the analysts said.
The budget was almost as rand friendly as it
could be.
"The market has been right to push the rand stronger," he said.
The rand was trading at R7.60 to the dollar at 17:00 on Wednesday
- I-Net Bridge