The rand weakened by about 0.6% as Asian traders reacted to a report Fitch Ratings issued on Thursday night giving a downbeat view of the medium-term budget that new finance minister Tito Mboweni presented on Wednesday.

Fitch said the budget Mboweni presented on Wednesday “does not contain significant offsetting fiscal measures” — ratings agency speak for an unwillingness to rein in rising government debt. “This pushes the prospect of debt stabilisation further into the future,” Fitch said in its media release on Thursday night. Fitch’s most recent sovereign ratings report on SA was in June, when it held its rating of government bonds at BB+ — its first tier of junk — with stable outlook. It cut SA’s rating to sub-investment grade in April 2017. “The rating reflects persistent low-trend growth. The evolution of fiscal policy in response to the recession and political and social pressures will remain an important part of our sovereign-rating assessment,” Thursday night’s statem...

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