- For more financial news, go to the News24 Business front page.
The rand staged a remarkable recovery after US president Donald Trump's pledge to pause tariffs on some trading partners.
The local currency gained 60c in short order against the dollar, trading at R19.2852 on Wednesday night.
Trump said he would pause higher reciprocal tariffs on dozens of non-retaliating countries for 90 days, while raising duties on China to 125%.
It wasn't immediately clear which nations would receive tariff relief. Those who do would still be taxed at the 10% baseline rate that went into effect on Saturday. Trump said that more than 75 countries had contacted his administration to negotiate on trade barriers and "have not, at my strong suggestion, retaliated in any way, shape, or form".
South Africa has not introduced new tariffs on the US, with Minister of Trade, Industry, and Competition Parks Tau saying that imposing reciprocal tariffs on the US before engaging with it would be "ill-considered".
The rand reached a record low against the US dollar earlier in the day, surpassing a level it last hit in June 2023 as investors reacted to the global trade war and fragile local politics.
The currency reached 19.9328 per dollar in Johannesburg. It pared the loss to trade at 19.8250 at 17:30.
"The rand is being pummelled by the triple whammy of being used as the liquid emerging market bellwether currency to hedge against under-performance in risk assets, as well as by the ongoing collapse in commodity prices, and by the internal domestic turmoil presented by instability in the governing coalition," said Phoenix Kalen, head of emerging markets research at Societe Generale in London.
The rand is among the most liquid currencies in developing markets, and is often used as a proxy for risk sentiment.
"With trade uncertainties high, asset price volatility elevated, and global growth probabilities continuing to be revised lower, we expect short-term weakness in ZAR to continue," Kalen said.
Additional reporting by News24.
