FX.co ★ South African Rand Steady at 5-Month High

The South African rand maintained its position around 17.9 per USD, marking its strongest level in approximately five months. This stability follows the finance minister's presentation of the third iteration of the budget and precedes President Ramaphosa's meeting with US President Trump, which is aimed at enhancing bilateral relations. In the latest economic forecast, the finance minister revised the 2025 growth projection downward to 1.4%, compared to 1.9% in March, and declared ZAR 69.4 billion in spending reductions to counterbalance the withdrawal of a proposed VAT increase. Despite these measures, the budget deficit is now anticipated to reach 4.8% of GDP, with gross debt forecasted to climb to 77.4%, surpassing prior forecasts. Concurrently, President Ramaphosa is said to be assembling a package of trade incentives to introduce during his visit to the US. On the monetary policy front, the Reserve Bank has not indicated any immediate plans to adjust its 3%–6% inflation target, although speculation over a possible change has buoyed investor confidence. Consumer price inflation ticked up modestly to 2.8% in April, from 2.7% in the preceding month.