USD/ZAR Price, Analysis and Charts:
- President Ramaphosa to unveil 8 priority areas in the economic recovery plan
- USD/ZAR[1] showing short term consolidation around 16.50 and other tech levels to consider in the run up to the US election
- Finance Minister seeks one week postponement to deliver the Mid Term Budget Policy Statement citing time frames of new economic recovery plan
Economic Reconstruction and Recovery Plan: Funding Remains Key
Tomorrow, President Cyril Ramaphosa is set to present the economic reconstruction and recovery plan to a special sitting of parliament, focusing on eight priority areas.
The plan seeks to address a number of longstanding economic issues that have been exacerbated by Covid-19 and paves a way forward as we adapt to the ‘new normal’ as society transitions to a reality of co-existence with Covid-19.
Ramaphosa briefly introduced some information on the plan to a two-day Cabinet lekgotla (meeting called by government to discuss strategy planning) on the 7th of October.
Eight Priority Areas of the Economic Reconstruction and Recovery Plan:
- Ensuring energy security
- Having a thriving industrial base that creates jobs
- Mass public employment programmes
- Infrastructure that meets NDP (National Development Plan) 2030
- Macroeconomic interventions from strengthening tax collections to tax holidays in vulnerable sectors
- Green economy
- Food security
- Reviving the tourism sector
However, funding economic recovery plan poses a potential challenge as the South Africa is already running a budget deficit, expected to be in the region of 14.6% of GDP[2]. Thursday may provide further clarity regarding exactly how these initiatives will be funded, whether it will be via public or private investment or a combination of both.
USD/ZAR: Key Technical Levels
The USD/ZAR[3] currency pair continues to trade beneath the descending trendline[4] from a
