Johannesburg - The South African rand was largely stable against the dollar in early Tuesday trade, with sentiment likely to be driven mainly by the outcome of public sector wage talks as well as key data out of the US and UK.
The government has offered a seven-percent wage hike, which it hopes workers will accept to avert a potentially crippling strike.
On Monday, Finance Minister Nhlanhla Nene warned that the public sector wage bill was a risk to the budget. Nagging shortfalls on both the national budget and current account have long been a drag on the rand.
At 06h02 GMT, the local unit traded at 11.8750 to the dollar, barely changed from Monday's close at 11.8875.
Market sentiment would be mainly externally driven during the session, with eyes on UK inflation and US housing data, Standard Bank trader Warrick Butler said.
“Watch the local wires for any news out regarding the public wage sector negotiations. A dual statement is due today from both counterparties and the result will have a large impact on South Africa's fiscal situation,” Butler added.
In fixed income, government bonds were slightly weaker, with the yield on the 2026 benchmark paper adding 1.5 basis points to 8.065 percent.
Reuters