Rand weakens after Budget Speech sensationally cancelled

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South Africa’s randweakened on Wednesday afternoon after Finance Minister Enoch Godongwana’s 2025 Budget Speech was sensationally cancelled at the last minute.

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Scheduled to start at 14:00, Speaker of the National Assembly, Thoko Didiza, announced 15 minutes after the hour that the Budget Speech would not take place as scheduled.

This follows a disagreement between parties within the Government of National Unity (GNU) on the proposals within the budget.

It was widely reported ahead of the scheduled speech that Value-Added Tax (VAT) was to be hiked by two percentage points, taking it from 15% to 17%.

This was corroborated by a leaked 2025 tax summary document for SARS, which showed the hike.

While adjustments to the zero-rated tax basket would have been made, parties – primarily the Democratic Alliance (DA) – reportedly took great exception to this.

The Budget Speech is now expected to be delivered on an unconfirmed date in March 2025.

At the time of publishing, the rand was trading as follows against five major currencies:

Australian Dollar	11.7796
Pound	23.34176
Euro	19.34134
New Zealand Dollar	10.59795
US Dollar	18.5548

Clues

Earlier, the rand was little changed on Wednesday, ahead of the Budget Speech.

At 09:15, the rand traded at 18.4050 against the dollar, near its previous close.

Investors were keenly awaiting the Budget Speech for clues on the coalition government’s fiscal priorities, its roadmap to tackle debt and economic reforms.

“A well-received budget could push USD-ZAR below 18.3000,” said Andre Cilliers, currency strategist at TreasuryONE.

However, he said the local currency could come under pressure over lack of reforms and concerns over spending discipline and taxation.

Meanwhile, South Africa’s benchmark 2030 government bond was weaker in early trading, with the yield up 3 basis points to 9.155%.