The South African rand was on track to end this week as the best performer amongst its CEEMEA peers after President Ramaphosa’s speech, Piort Matys from Rabobank reports. USD/ZAR is being exchanged at 14.8505 after falling this week.
“Ramaphosa reiterated his commitment to consolidate public finances by reducing spending and improving its composition. ‘Our debt is heading towards unsustainable levels, and spending is misdirected towards consumption and debt-servicing rather than infrastructure and productive activity’.
“Essentially, President Ramaphosa said exactly what investors would like to hear. And this, perhaps, is the issue – we have heard all that before and yet the economy is barely growing.”
“To avoid a downgrade to junk – and substantial capital outflows that would follow – the pace of economic reforms must accelerate markedly. Even a credible budget that FinMin Mboweni will reveal on February 26 may not prove enough.”