Budget 2026 | Rand holds steady at R16 as investors await critical economic insights
The rand traded at R16.01 against the US dollar just before 10am on Tuesday as markets remained cautious ahead of Finance Minister Enoch Godongwana’s Budget on Wednesday.
Trading Economics said the rand was slightly firmer, supported by rising precious-metal prices and a softer dollar, with investors positioning ahead of Wednesday’s Budget.
“Investors are optimistic ahead of Finance Minister Enoch Godongwana’s Wednesday budget,” it said.
Wichard Cilliers, head of Market Risk at TreasuryONE, said the currency had been one of the standout performers over the past year.
“The rand has been one of the standout performers over the past year, boosted by high precious-metal prices, political stability and signs of economic reform,” he said.
However, after a 17% rally, Cilliers said investors were becoming more guarded.
Cilliers said the fiscal update could shape the rand’s next move.
“A strong fiscal update could support the currency and keep it near the R16.00 level or stronger. However, any disappointment – or renewed global risk aversion linked to trade tensions – could see the rand give back some of its recent gains.”
Last Friday, the US Supreme Court overturned President Donald Trump’s implementation of tariffs under the particular law he used to implement. In a six to three vote, judges said he must go through Congress.
This has resulted in jitters over policy.
The uncertainty around the impact of the new tariffs in the US is high, but for South Africa, the ruling will have little impact on gross domestic product even if the US maintains its 30% tariff on national security and other South Africa- specific grounds, and also with a fall away in African Growth and Opportunity Act benefits, said Bishop.
The oil price recently jumped above $70 to the barrel on the lift in Middle East tensions last week, strengthening the rand and gold, said Bishop.
Bishop noted that the rand has also seen some mild gains recently as the gold price has lifted on the escalation in geopolitical risks and US policy uncertainty, lifting the gold price, as the US masses forces close to Iran. The US still seeks to curtail Iran’s nuclear capability.
Oil prices would obviously rise too, with South Africa already seeing a switch to a fuel price hike in March, after a series of petrol price cuts or very little change to date, aiding the moderate nature of the inflation rate, Bishop said.
Market commentators are watching to see if there is an increase in the fuel levy in tomorrow’s National Budget.
