South Africa’s rand firmed against the dollar early on Wednesday after President Cyril Ramaphosa announced a 500 billion rand ($26.41 billion) rescue package on Tuesday evening to cushion the economic blow of the COVID-19 pandemic.
At 0620 GMT, the rand traded at 18.9350 per dollar, 0.32% firmer than its previous close.
Among the measures to fund the rescue package, Ramaphosa said South Africa had approached global financial institutions like the World Bank, International Monetary Fund, the BRICS New Development Bank and the African Development Bank, primarily to fund healthcare interventions.
The rest of the package would be financed by a mix of 130 billion rand of reprioritised spending by the government and other local sources, as well as 200 billion rand in loan guarantees in partnership with the central bank, finance ministry and commercial banks.
“Over the next two days we will be looking towards Finance Minister Tito Mboweni and President Cyril Ramaphosa for further details on the implementation of the massive stimulus package …as well as the phased reopening of the economy,” said Bianca Botes, executive director at Peregrine Treasury Solutions.
South Africa, which imposed a five-week nationwide lockdown to the end of April, has the most confirmed coronavirus cases in sub-Saharan Africa, at 3,465, with 58 deaths.
In fixed income, the yield on the 10-year government bond due in 2030 was down 0.5 basis points to 10.330%.