Rand under pressure as Budget talks stall

South Africa’s rand gyrated as talks between the two main partners in the coalition government aimed at securing a deal on the national budget continued.

The currency traded 0.1% weaker at R18.34 per dollar in Johannesburg on Tuesday after earlier appreciating as much as 0.3%.

The African National Congress and the Democratic Alliance held talks on Monday aimed at resolving the impasse over the budget, which erupted after the DA objected to Finance Minister Enoch Godongwana’s proposal to raise taxes. 

The DA has threatened to oppose Godongwana’s spending plan without concessions from the ANC, and DA leader John Steenhuisen reiterated on Tuesday that the coalition risks fracturing unless a deal is agreed.

“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,” DA leader John Steenhuisen said.

The party’s spokesman for finance, Mark Burke, said in an interview on broadcaster Newzroom Afrika that he’s optimistic a deal will be agreed.

“The conversation between the ANC and the DA is constructive and ongoing,” he said. The sentiment was echoed by Mdumiseni Ntuli, the ANC’s chief whip, who also spoke on Newzroom Afrika.

 The DA postponed a media briefing on the budget negotiations that had been scheduled to take place on Tuesday morning until further notice.