JOHANNESBURG (Reuters) -The South African rand strengthened on Thursday to trade below 17 rand to the dollar for the first time since February 2023, propelled by investor optimism over the previous day’s budget review and a weaker U.S. currency on global markets.
At 0902 GMT the rand traded at 16.9925 against the dollar.
Financial markets responded positively to Finance Minister Enoch Godongwana’s announcement of a lower inflation target on Wednesday, as well as his commitment to stabilise public debt in the mid-year budget review.
Shaun Murison, a senior analyst at Rand Swiss, said speculation that ratings agency S&P Global will upgrade South Africa’s sovereign rating at a scheduled review on Friday was also fuelling the rand’s advance.
“If the momentum continues, perhaps we could see a move towards the R16.80/$ mark shortly,” said Murison.
Johannesburg-listed stocks and government bonds also gained on Thursday.
The Johannesburg Stock Exchange’s Top-40 index last traded up 2.2%, and the yield on the benchmark 2035 government bond fell 5.5 basis points to 8.605%.
(Reporting by Sfundo Parakozov; Editing by Alexander Winning)
