Rand slumps amid SA budget turmoil, political uncertainty

DA says party will file papers in the High Court to challenge passing of the 2025/26 Budget

- SIPHELELE DLUDLA

THE RAND depreciated further by more than 1.6% to R18.78 to the US dollar by 7pm on Wednesday night, a fresh low since February 28, as investors reacted to rising political uncertainty amid budget turmoil.

Members of Parliament (MPs) voted in favour of passing the National Budget with a slight margin in a protracted vote as 194 supported the fiscal framework with the proposed 0.5% increase in the value-added tax (VAT) while 182 opposed it.

However, the process is not complete by any stretch as MPs have now given a 30-day period in which they will thrash out outstanding issues about the VAT increase, with a big push for its total scrapping.

The two largest parties in the ruling coalition have been negotiating for weeks to reach an agreement on the contested budget, marking the biggest test yet for the government of national unity formed after the ANC lost its parliamentary majority last year.