South African rand falls to all-time low

USD/ZAR is nearing 20.00 as this pair blows out following US tariffs on South Africa and major worries about global growth.

This is a cruel blow for the rand at a time when gold prices are near all-time highs. The country has made progress on electricity outages but there is little momentum in the economy.

Growth in 2024 was just 0.6% and the South African Reserve Bank in late March trimmed its 2025 forecast to 1.7% from 1.8%. Inflation has also ticked back up with a forecast for 4.5% this year from 3.6% in 2024.

The central bank is guiding towards rates stabilizing at 7.25%, or 25 basis points below current levels though said they would be taken on a meeting-by-meeting basis. That was before Trump imposed a 31% tariff on South Africa and also referenced political grievances.

“They have got some bad things going on in South Africa. You know, we
are paying them billions of dollars, and we cut the funding because a
lot of bad things are happening in South Africa. The fake news ought to
be looking at it, they don’t want to report it,” he said, before
continuing to name other countries.

I will be in Cape Town on May 29-30 for the Finance Magnates Africa Summit. I hope to see you there.

This article was written by Adam Button at www.forexlive.com.