State bank technically insolvent, and good news for naturalised citizens wanting Smart IDs

The South African rand remained relatively stable on Friday, as financial markets focused on the upcoming US-China trade talks this weekend.

This comes after a deal between the US and Britain raised hopes for progress in tariff negotiations with other countries.

The rand was trading at 18.23 against the dollar, reflecting a slight decline of about 0.1% from Thursday’s closing level.

Over the past month, the currency has shown significant recovery from a record low reached in early April, a time when investors were concerned about US President Donald Trump’s tariffs and ongoing domestic budget disputes.

A key factor supporting the rand’s strength has been the indications that South Africa’s coalition government will remain intact.

This stability was reinforced when Finance Minister Enoch Godongwana decided to withdraw the proposed increase in value-added tax, which had previously revealed deep divisions within the coalition.

On Monday, 12 May, the rand was trading at R18.25 to the dollar, R24.15 to the pound and R20.48 to the euro. Oil was trading slightly lower at $63.12 a barrel.

Here are five other important things happening in and affecting South Africa today:

Postbank technically insolvent: The financial report for the South African Postbank for the 2024 fiscal year indicates that the state bank cannot settle all its liabilities by liquidating its assets, making it technically insolvent. If this situation is not addressed, it could lead to bankruptcy. Additionally, the Postbank’s declining capital adequacy ratio and its inability to meet minimum requirements jeopardise its banking license. [Daily Intestor]

Good news for naturalised citizens: Home Affairs Minister Leon Schreiber announced that 1.4 million naturalised citizens and lawful permanent residents can now apply for a Smart ID via the e-Home Affairs platform. Initially, applications will be processed from visa-exempt countries before expanding to others. [BusinessTech]

Afrikaner ‘refugees’ head to the US: The United States is set to welcome its first group of white Afrikaners from South Africa, designated as refugees by the Trump administration. 49 of these “refugees” are expected to arrive on Monday, 12 May, and will be greeted by officials from the Departments of State and Homeland Security. [Business Day]

Positive signs for the budget 3.0: Leaders of the Government of National Unity met in Johannesburg and reportedly reached an agreement that could allow the national budget to be approved on 21 May. Convened by President Cyril Ramaphosa ahead of Finance Minister Enoch Godongwana’s budget presentation, the meeting reportedly resulted in agreement on key issues that had delayed progress. Insiders shared that the leaders left the meeting smiling, having committed to passing the budget next week. [City Press]

Green shoots for property in south Africa: Standard Bank has noted that the property market in South Africa remains resilient despite high interest rates, the lingering effects of the post-COVID-19 recovery, and muted domestic growth. It added that the residential market shows lower vacancy rates, increased investment in build-to-rent and build-to-sell developments, and a steady rise in rental yields. [Moneyweb]