The South African rand traded around 16.4 per USD, its strongest level since late September, amid a broadly stable US dollar and optimism ahead of the upcoming budget statement. Investors are turning their attention to Finance Minister Enoch Godongwana’s medium-term budget policy statement due on October 21, amid expectations of stronger tax revenue collection, a narrowing fiscal deficit and a more sustainable debt trajectory. Progress on these fronts could strengthen confidence in South Africa’s public finances and support further sovereign credit rating upgrades. Still, record-high fuel prices, weak economic growth and pressure to increase public spending ahead of the November 4 local government elections pose challenges to sustained fiscal improvement. Attention will also be on inflation data for September and retail sales set to be pubished on the same day.