The rand fell the most in two weeks against the dollar as a political rift between South Africa\u2019s two main governing parties widened, adding to growing concerns about US President Donald Trump\u2019s tariff threats.<\/p>\n\n\n\n
The country has seen outflows from local asset markets despite offering investors higher yields than many peers.<\/p>\n\n\n\n
That\u2019s partly due to concerns that the government of national unity had spurred investor confidence, which won\u2019t last, said Warrick Butler, the head of foreign exchange trading at Standard Bank Group.<\/p>\n\n\n\n
The tension came to a head last week when the Democratic Alliance declared a dispute within the nation\u2019s coalition government, days after President Cyril Ramaphosa assented to a new law that will make it easier for the state to expropriate land.<\/p>\n\n\n\n
The party criticised Ramaphosa\u2019s African National Congress for failing to adhere to procedures set out in a coalition deal agreed last year.<\/p>\n\n\n\n
\u201cThe signing of the expropriation bill seems to have caught some of the partners by surprise, and the market dislikes uncertainty,\u201d Butler said.<\/p>\n\n\n\n
The rand fell 1.5% to 18.6678 per dollar as of 1:50 p.m. in Johannesburg, the worst performance out of 23 major emerging-market currencies monitored by Bloomberg.<\/p>\n\n\n\n
According to Bloomberg data, foreign investors have sold a net R20.7 billion ($1.1 billion) of South African stocks since the start of the year. <\/strong><\/p>\n\n\n\n Speculative accounts held the most short-rand contracts on a net basis since September 2023, according to data from the Commodities Futures Trading Commission.<\/p>\n\n\n\n The ANC\u2019s support in national elections in May fell below 50% for the first time since 1994, forcing it into a coalition including the business-friendly DA. <\/p>\n\n\n\n That reassured investors, with the rand rallying to a 13-month high before giving up some of the gains after Trump\u2019s election victory in November.<\/p>\n\n\n\n The rand rallied again after last week\u2019s inauguration as investors concluded that Trump\u2019s tariff threats are more bark than bite \u2014 but this weekend\u2019s spat with Colombia upended those bets. <\/p>\n\n\n\n The US president threatened tariffs against Columbia to wrest an agreement on returning migrants, raising concerns he may use the same strategy to target other nations.<\/p>\n\n\n\n The US is South Africa\u2019s second-biggest trading partner and the rand is often seen as a proxy for risk appetite in emerging markets.<\/p>\n\n\n\n The rand\u2019s decline Monday \u201cto a great extent reflects the swings in response to Trump\u2019s latest rhetoric,\u201d said Henrik Gullberg, a macro strategist at Coex Partners. <\/p>\n\n\n\n \u201cAnything that threatens the promising structural narrative in South Africa is not good news.\u201d <\/p>\n\n\n\n South Africa has seen billions of rands in outflows from local asset markets despite offering investors higher yields than many peers. <\/p>\n","protected":false},"author":59,"featured_media":687567,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[1850,853,499],"class_list":["post-808956","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-bloomberg","tag-south-africa","tag-standard-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/808956","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=808956"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/808956\/revisions"}],"predecessor-version":[{"id":809006,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/808956\/revisions\/809006"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/687567"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=808956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=808956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=808956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n","protected":false},"excerpt":{"rendered":"