JOHANNESBURG: South Africa’s rand was hovering near a three-month low on Thursday after being hit by a double-whammy of U.S. President Donald Trump’s announcement of new and higher tariffs and the passing of a contentious budget vote that has threatened the ruling coalition’s future.
At 0811 GMT, the rand traded at 18.90 against the dollar , not far from its previous close. It hit 19.0150 per dollar earlier in the day, its weakest since mid-January.
On Wednesday, Trump announced a 10% baseline tariff on all imports to the United States, and higher duties on dozens of countries, including South Africa, which was hit with a 30% rate.
Trump said the tariffs were a response to duties and other non-tariff barriers put on U.S. goods.
South Africa’s parliament had earlier passed the budget’s fiscal framework on Wednesday after weeks of political wrangling, but the second-biggest party in the coalition, the pro-business Democratic Alliance (DA), voted against the measure and said it would challenge the outcome in court.
South Africa’s rand falls further after DA says budget talks break down
The rand gradually weakened over the course of the day on Wednesday as markets fears grew that the DA may potentially exit the coalition, and went into freefall after the tariff announcement. It slipped as much as 2.6% against the dollar.
On the stock market, the Top-40 index was down about 2.5%.
South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 7.5 basis points to 9.39%.
Comments