The South African rand was stable on Thursday after the finance ministry said it was withdrawing a contentious increase in value-added tax (VAT) that was due to take effect next month and as investors awaited clarity on the budget plans.

Following the announcement by Finance Minister Enoch Godongwana to abandon the proposed VAT increase, the South African rand has shown signs of recovery, gaining value against the US dollar. This decision comes amid significant opposition and legal challenges from various political factions.

The USD/ZAR exchange rate has suffered a sharp reversal this month as the falling US dollar pushed investors out of the greenback