By Tannur Anders
JOHANNESBURG (Reuters) -South Africa’s rand firmed on Friday as investors awaited clarity amid a dispute over the national budget that has rattled domestic markets.
At 1500 GMT, the rand traded at 18.7475 against the dollar, about 0.3% stronger than its previous close.
South Africa’s political parties have clashed over a proposal to raise the value-added tax rate by 1 percentage point over the next two years.
The VAT increase was withdrawn on Thursday and domestic-focused investors are awaiting details on the next steps in the budget process.
Top leaders of the African National Congress and the Democratic Alliance, the two biggest parties in the coalition government, met on Friday and held discussions on the way forward, the parties said in separate statements.
Like other risk-sensitive currencies, the rand often takes its cue from global factors and domestic drivers.
In addition to the budget dispute, the rand has experienced bouts of volatility linked to uncertainty over U.S. President Donald Trump’s tariff plans.
Trump this week said his administration is talking with China to strike a tariff deal, Time magazine reported. Beijing has so far disputed the U.S. characterization of talks.
South Africa’s President Cyril Ramaphosa said on Thursday he had spoken to Trump and discussed fostering good relations between the two countries, which have soured since Trump took office in January.
On the stock market, both the Top-40 index and the broader all-share index closed about 0.2% higher.
South Africa’s benchmark 2030 government bond was steady, with the yield at 8.87%.
(Reporting by Tannur Anders, Sfundo Parakozov and Bhargav Acharya; Editing by Jacqueline Wong, Susan Fenton and Hugh Lawson)
