The South African rand has fallen to unprecedented levels against the U.S. dollar, reaching 19.8225 on April 9, 2025, nearing its June 2023 record of 19.9075. This marks a decline of over 3% within the week. The depreciation is attributed to escalating global trade tensions and internal political instability.
The recent downturn follows U.S. President Donald Trump’s imposition of a 10% baseline tariff on all imports, with South African goods facing a specific 31% duty. This move has significantly impacted key South African exports, including vehicles, precious metals, machinery, and citrus products. In response, South Africa has expressed an urgent desire to negotiate a new trade agreement with the U.S.
Domestically, tensions within the ruling coalition government have further unsettled investors. The Democratic Alliance , the second-largest coalition party, opposed the fiscal framework in Parliament and initiated legal action challenging its outcome. This discord has raised concerns about the stability of the Government of National Unity, with fears that the pro-business DA may withdraw from the coalition. Despite reassurances from both coalition parties, market apprehensions persist.
