{"id":838546,"date":"2025-09-29T16:06:01","date_gmt":"2025-09-29T14:06:01","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=838546"},"modified":"2025-09-29T16:06:07","modified_gmt":"2025-09-29T14:06:07","slug":"the-rands-winning-streak-has-nothing-to-do-with-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/838546\/the-rands-winning-streak-has-nothing-to-do-with-south-africa\/","title":{"rendered":"The rand’s winning streak has nothing to do with South Africa"},"content":{"rendered":"\n

The rand has strengthened against the US dollar since the start of the year, but the apparent winning streak has little to do with local improvements.\u00a0<\/p>\n\n\n\n

Investec Chief Economist Annabel Bishop noted that the rand continues to move towards the R17.20\/$ level on the back of a weak US dollar.<\/p>\n\n\n\n

This marks the strongest point for the currency in almost 12 months, last hitting below that level in September 2024.<\/p>\n\n\n\n

This means the rand has not necessarily strengthened on its own merits, with the improvement solely due to the depreciation of the US dollar.\u00a0<\/p>\n\n\n\n

Notably, even though the rand has strengthened against the dollar, it actually weakened in ‘real’ terms.<\/p>\n\n\n\n

Bishop pointed out that the US dollar has weakened by 9.7% since the start of the year\u2014but the rand is only 8.3% stronger against the US dollar in the same period.\u00a0<\/p>\n\n\n\n

Thus, the land has actually lost ground against the dollar and weakened by 1.4% on a net basis.<\/p>\n\n\n\n

Dollar weakeness has been driven by concerns over US economic growth, the Trump administration\u2019s preference for a weaker dollar, and increased expectations of US interest rate cuts in the coming months.<\/p>\n\n\n\n

When interest rates are cut in the US, the South African rand tends to benefit, as investors are drawn to the higher returns offered by South Africa. <\/p>\n\n\n\n

The rand’s overall weakness can also be seen through other markets.<\/p>\n\n\n\n

While the rand has strengthened against the dollar since the start of the year, the currency has seen little positive movement against the euro or pound.\u00a0<\/p>\n\n\n\n

Bishop noted that the rand has weakened by 3.6% since the start of the year against the euro, while the rand only strengthened 0.4% against the pound since the start of the year.\u00a0<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Ramaphosa\u2019s moves are unsuccessful <\/h2>\n\n\n\n

The rand has also failed to see any improvements following President Cyril Ramaphosa\u2019s trip to the US and engagements with senior US officials. <\/p>\n\n\n\n

South Africa was hit by a 30% \u201creciprocal\u201d tariff by the US government in August, following months of failed negotiations to settle. <\/p>\n\n\n\n

Ramaphosa and leaders from several other African nations sought a way to push through an AGOA extension, which expires tomorrow, 30 September.\u00a0<\/p>\n\n\n\n

AGOA gives duty-free access to American markets for African exports, and primarily benefits South African companies focused on automobiles and agriculture.\u00a0<\/p>\n\n\n\n

Despite the push to extend AGOA, the latest tariffs from the US superseded many trade benefits afforded by the programme.<\/p>\n\n\n\n

Speaking on the sidelines of the United Nations General Assembly in New York, Ramaphosa highlighted the strong trade ties between South Africa and the US. <\/p>\n\n\n\n

He noted that South Africa is the second-largest African destination for US exports, with further opportunities for collaboration possible. <\/p>\n\n\n\n

Ramaphosa noted that South Africa is positioning itself as a destination for critical minerals, with the \u201cdigital transition and the global move towards net zero driving global demand.\u201d<\/p>\n\n\n\n

The president also highlighted the opportunity to engage with US industry over investment opportunities in technology, agriculture, healthcare, advanced manufacturing and other key sectors.\u00a0<\/p>\n\n\n\n

Ramaphosa held several speaking engagements in the US in a bid to improve ties, which also included meeting members of the US Congress and Senate. <\/p>\n\n\n\n

\u201cAs the official talks around trade tariffs continue, we take to heart the words of the US Chamber of Commerce representative at the recent dialogue, that expanding commercial partnerships happens one deal, one investment at a time,\u201d said Ramaphosa. <\/p>\n\n\n\n

\u201cPredictable, preferential access to the US market isn\u2019t just vital to South Africa\u2019s own exports, but also to US companies that depend on reliable imports.\u201d<\/p>\n\n\n\n

Despite Ramaphosa praising the engagements, Bishop noted that the rand has not gained significantly, as it tends to be driven by the direction of international currencies.<\/p>\n","protected":false},"excerpt":{"rendered":"

The rand’s recent strength against the US dollar has more to do with the developments in the US than any improvements in South Africa.<\/p>\n","protected":false},"author":95,"featured_media":750456,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[1498],"class_list":["post-838546","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-investec"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838546","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=838546"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838546\/revisions"}],"predecessor-version":[{"id":838568,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/838546\/revisions\/838568"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/750456"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=838546"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=838546"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=838546"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}