Rand Rebounds Amid Political Uncertainty; Markets Eye Budget Talks and Manufacturing Data
Financial Indicators: Market Snapshot
Rand Exchange Rate
The South African rand experienced a cautious rebound on April 11, 2025, strengthening by approximately 0.5% against the U.S. dollar to 19.3675. This recovery follows a week of significant volatility influenced by global trade tensions, particularly uncertainties surrounding U.S. tariff policies. The rand had previously hit a record low earlier in the week but rebounded after a 90-day suspension of increased tariffs affecting countries like South Africa was announced.
JSE Performance
The Johannesburg Stock Exchange (JSE) All Share Index closed at 72,500 points, reflecting a modest gain of 0.3% from the previous session. The Resource 10 Index led the gains, buoyed by a 1.2% increase in mining stocks, while the Financial 15 Index remained flat.
Government Bonds
South Africa’s benchmark 2030 government bond yield edged up by one basis point to 9.25%, indicating a slight weakening amid ongoing political uncertainties and budgetary concerns.
Economic Indicators
Budget Deficit and Debt
The National Treasury forecasts a consolidated budget deficit of 5.0% of GDP for the fiscal year ending March 2025, higher than previously anticipated. Gross debt is projected to stabilize at 75.5% of GDP by 2025/26. These figures reflect challenges in revenue collection and increased public expenditure.
Manufacturing Sector
The seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose to 48.7 in March from 44.7 in February, indicating a slight improvement in manufacturing conditions. However, the index remains below the 50-point mark that separates expansion from contraction, suggesting ongoing challenges in the sector.
Outlook
While the rand’s recent recovery offers a glimmer of hope, sustained economic stability hinges on resolving domestic political tensions and implementing effective fiscal policies. Investors will closely monitor upcoming budget discussions and economic data releases for further insights into South Africa’s financial trajectory.
Also read: Trump US Tariff Pause Brings Mixed News for SA as China Ties Complicate Trade Outlook
