The rand weakened more than 1% to R18.42 against the US dollar, as Budget talks hit an impasse.
Image: Picture: Henk Kruger/Independent Newspapers
The South African rand was on the backfoot in early trade on Tuesday, April 1, following the reported collapse of 2025 Budget talks between members of the Government of National Unity (GNU).
After appreciating to R18.24 against the US dollar early on Monday, the local currency experienced a volatile session. By 7.30am on Tuesday, it had depreciated to R18.42, its weakest point since early March.
According to reports, the GNU's two main partners, the African National Congress (ANC) and Democratic Alliance (DA), held talks on Monday evening in an attempt to resolve the 2025 Budget impasse, but these failed to reach a resolution.
As a result, both parties postponed media briefings that were scheduled to take place on Tuesday morning.
The deadlock has also put the fragile GNU at risk, DA leader John Steenhuisen stated in a post on X on Tuesday.
"Time is almost up. Last night, the ANC refused to finalise an agreement on growth and spending reforms, imperilling the GNU. The DA will oppose the budget unless and until a written agreement is reached," Steenhuisen said.
On Monday it was reported that the ANC and DA were close to forming a deal on the 2025 Budget, which would give the latter more influence over economic policies going forward.
This followed the DA's initial rejection of the incremental 0.5% Value Added Tax (VAT) proposal in the ANC's budget.
“The ANC has agreed to some of the DA’s terms, but remember it was not only the DA - all GNU partners were involved. We are talking about comprehensive reviews of expenditure and the decentralisation of authority over ports and rail,” an ANC insider said.
The 2025 Budget vote is expected to take place on Wednesday, April 2.
IOL
Related Topics: