JOHANNESBURG (Reuters) -The South African rand weakened on Tuesday as lawmakers on a parliamentary committee recommended further changes to the country’s budget, adding uncertainty to an already murky fiscal picture.
The majority of lawmakers on the Standing Committee on Finance, the first parliamentary hurdle for the budget, recommended the budget be amended to remove a VAT increase of 1-percentage point spread over two years and adjust personal income tax brackets for inflation.
The proposal also recommended that the National Treasury be given 30 days to come up with alternative revenue measures and expenditure savings.
The budget was originally meant to be presented in February but was delayed at the last minute. A revised version was put forward in March.
At 1630 GMT, the rand traded at 18.40 against the dollar, about 0.4% weaker than its previous close.
Trade in the rand tends to be highly volatile when there are major local drivers, such as budget wrangling or global risk events.
A local purchasing managers’ index survey showed on Tuesday that conditions for manufacturers remained depressed in March.
(Reporting by Sfundo Parakozov;Editing by Alexander Winning, Andrew Heavens and Barbara Lewis)
