The rand has remained steady against the dollar in early trade on Monday. The rand holds its close to three-year high that was reached after President Cyril Ramaphosa said in the State of the Nation Address on Friday that tough decisions regarding the repair of the economy would have to be made.
At 0645 GMT, the rand traded at R11.6600 per dollar. This is not far off its close of R11.6375 on Friday.
On Friday, the rand raced to a three-year high of R11.5600/dollar when Ramaphosa said the ANC was committed to “policy certainty and constituency” and that difficult decision would be made to try close stabilise debt and close the fiscal gap.
On Thursday, Ramaphosa was sworn in as the President of the Republic after his embattled and scandal-plagued predecessor Jacob Zuma finally resigned after nine years in office.
Zuma resigned on Wednesday evening on orders of the African National Congress. Pressure on the party to have Zuma removed heightened after Cyril Ramaphosa was elected as president of the ANC at the election conference in December 2017.
According to Nedbank analysts, despite the appearance of a well-received state of the nation address by the markets, there is still a lot to be done in order to rescue the local economy.
“[T}his will undoubtedly take time after nearly ten years of mismanagement and corruption,” the analysts said.
All eyes are now on the National Budget Speech set to be delivered by Finance Minister Malusi Gigaba on Wednesday.
In fixed income, the yield on the benchmark government bond due in 2026 was down 3 basis points to 8.08%, reflecting stronger bond prices.