Rand Investors Await the Devil in the Detail of Eskom Debt Plan
- Currency rallied, then narrowed gains post budget presentation
- Power utility to receive 254 billion rand from government
Enoch Godongwana arrives for a news conference ahead of the budget presentation in Cape Town, South Africa, on Feb. 22.
Photographer: Dwayne Senior/BloombergThis article is for subscribers only.
South African Finance Minister Enoch Godongwana spurred a brief relief rally in the rand as he presented the country’s budget, unveiling news of anxiously awaited plans to deal with debt at the ailing state-run power utility.
The rand strengthened as much as 0.7% against the greenback, but was little changed shortly after Godongwana was done speaking. The yield on South Africa’s most liquid debt due 2026 did hold a decline, in a sign that investors are optimistic that the plan to transfer Eskom Holdings SOC Ltd. debt to the state won’t have a dramatic effect on the government’s overall debt metrics.