South African rand dips amid budget dispute and U.S. tariff anticipation

Published 02/04/2025, 10:06
© Reuters.

Investing.com -- The South African rand experienced a decline in its value during early trading on Wednesday. The drop comes amid ongoing political disputes over the nation’s contested budget and as investors prepare for US President Donald Trump’s upcoming tariff plans.

The rand was recorded trading at 18.56 against the dollar at 0900 GMT, marking a roughly 0.5% decrease from its previous closing value.

The country’s budget managed to pass its initial hurdle in parliament on Tuesday. The largest party in the ruling coalition, despite facing doubts from lawmakers about some of its main revenue-generating strategies, managed to garner the necessary support.

However, the African National Congress, the ruling party, had to depend on the backing of a smaller party outside the coalition to approve the fiscal framework. This development sparked displeasure from its chief coalition partner, the Democratic Alliance, which claimed that a "line in the sand" had been crossed.

Further complicating the budget process, an opposition party has written to the parliament’s speaker, requesting to nullify Tuesday’s proceedings. The party also seeks to prevent lawmakers from convening on Wednesday to vote on the next phase of the budget process.

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