South Africa's rand is steady despite political headwinds
Image: Pixabay
Despite the ongoing tensions between the ANC and the DA, which threaten to disrupt the Government of National Unity (GNU), the local currency remains unfazed as the DA's ultimatum to President Cyril Ramaphosa to dismiss ministers passes without action.
Ramaphosa’s removal from the office of the then Deputy Minister of Trade, Industry and Competition, Andrew Whitfield, towards the end of last week resulted in a war of words between the two largest parties in the GNU.
DA leader John Steenhuisen last Thursday issued an ultimatum to Ramaphosa to get rid of three MPs in an effective “or else” message. “Within the next 48 hours, we will find out if the DA stands alone as the only party that can be trusted to govern responsibly and take South Africa forward,” he said.
That Saturday deadline came and went without Ramaphosa acceding to his wishes.
The rand has hardly moved. By lunchtime on Monday, it was trading at R17.77, more or less flat on the day. On a more historical level, it is trading at around a six-month low.
Andre Cilliers, currency strategist at TreasuryONE, said: “The DA's antics have had little effect on the rand”.
In a note, he stated that the DA is so “upset” that the party won’t be taking part in Ramaphosa’s new national discussion plan.
This plan brings together prominent figures, including business leaders and the rugby captain, to discuss how to address the country's problems, but it will cost R740 million, explained Cilliers.
Rand to the dollar as of 30 June 2025 South Africa's local currency holds firm against the dollar
Image: wise.com
South Africa’s rand is also seemingly ignoring the fact that the country has yet to sign a trade deal with the US as President Donald Trump’s tariff 90-day amnesty before his April 2 “Liberation Day” export taxes come back into effect.
Anchor Capital co-chief investment officer, Nolan Wapenaar, said that the “markets are rather myopically focused on the US Dollar at the moment, so what happens to the US dictates exchange rates”.
Wapenaar added that even the “recent domestic political rumblings were met with a rather mild response in the markets”.
However, the market is anticipating good tariff news, as Wapenaar said that “the market is trading with the narrative that Trump will pause the tariffs again if needed. This is a rather optimistic stance”.
Wapenaar anticipates the dollar to continue to weaken, with the rand set to continue to benefit.