South Africa

South African Rand firm after public wage cut announcement

The South African rand strengthened early on Thursday, a day after Finance Minister Tito Mboweni proposed cuts to the public sector wage bill. 

Financial markets cheered the proposal as rising public sector wages have long been a threat to the country’s stretched public finances. 

But some analysts are sceptical that the minister will be able to achieve the more than 160 billion rand ($10.5 billion) of wage cuts targeted over three years, given entrenched opposition from labour unions. 

At 0650 GMT, the rand traded at 15.2550 versus the dollar, around 0.4% stronger than its previous close. 

The only major domestic data release expected on Thursday is the producer price index, around 0930 GMT. Mboweni is also expected to brief lawmakers on his budget plans. 

Government bonds were firmer in early deals, with the yield on the 2026 bond down 4 basis points to 7.700%.

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