JOHANNESBURG: The South African rand weakened in early trade on Thursday, pressured by rising oil prices as investors continued to assess the government’s mid-year budget review, which included two months of temporary fuel tax relief.
At 0649 GMT the rand traded at 16.45 against the dollar , roughly down 0.5% from its previous close.
Oil prices rose more than $1 a barrel on Thursday after more Houthi attacks in Saudi Arabia stoked concerns over a broader escalation of conflict and further disruptions to supplies from the Middle East.
South Africa imports most of its fuel, leaving it vulnerable to swings in global energy prices. Its regulated petrol price rose about 5% in September before surging 12% in October.
The government will reintroduce temporary fuel levy cuts for two months from November, Finance Minister Enoch Godongwana said on Wednesday, in a 10 billion rand ($608 million) effort to ease cost-of-living pressures
South Africa’s benchmark 2035 government bond strengthened in early deals, as the yield fell three basis points to 8.56%.