The Rand’s trials and victories of 2025

Much like global politics, the Rand saw a tumultuous start to 2025. Various forces, ranging from local to global, have investors on high alert. 3Cube Property Solutions takes a look at the Rand’s performance against the US Dollar and analyses some of the factors that have affected the Rand’s performance in the first half of the year.

First things first: How has the Rand performed?

The Rand started the year trading between R18.75 and R18.90 to the US dollar, trending closer to the R19 mark in mid-January as global risk appetite softened. By 29 January, it had strengthened to R18.66 and February and March saw this favourable trend continue. By the end of March, the rand was trading at R18.26 to the US dollar.

April was characterised by trade concerns as US President Donald Trump made global headlines with his tariff demands. As the old saying goes, when America sneezes, the whole world gets a cold, and the Rand responded to this onset of illness by falling to its lowest point of the year: R19.72 to the greenback. Late April and May saw a gradual recovery, with the Rand settling at around the R18 mark.

Early June has seen the Rand’s best performance for the year to date, with R17.66 being reached on 10 June.

The impact of America’s involvement in South African politics

On 7 February 2025, Trump issued an executive order halting US aid to South Africa and simultaneously launching a refugee programme allowing Afrikaners to relocate to the US, citing their alleged persecution in South Africa. Three days later, he announced 25% tariffs on steel and aluminium. Both of these actions led to slumps in the Rand as investors reacted to fears of a global trade war and aid cuts.

March saw the US expel South African Ambassador Ebrahim Rasool, a move which, perhaps surprisingly, did not cause many jitters in the market.

All eyes were on the Rand in the aftermath of President Cyril Ramaphosa’s visit to the Oval Office in May. The Rand remained stable after this meeting. As Colleen Goko reported for Reuters in May, investors proved to be more interested in whether our inaugural Government of National Unity could withstand the pressures being exerted by Finance Minister Enoch Godongwana amid the budget fiasco.

The effect of local instability on the Rand

Closer to home, various political wranglings have impacted the Rand’s performance in the first half of 2025. This started early in the year, with a slight weakening being seen as a result of land expropriation uncertainty.

Delays in passing the national budget, which came about as a result of finance minister Enoch Godongwana’s ill-fated decision to raise VAT, was one of the primary factors that came into play in the second quarter. In nearly April, the result of this spat was a near-record low in the Rand, which traded at R19.82 to the US dollar on 9 April.

The revised budget, which was implemented in mid-May, brought relief to the market. The rand rebounded to around R17.70, reflecting the improved investor confidence in fiscal clarity and a responsible budget.

Converse effects: cooling inflation in the US and lower commodities demand

The moderation of US inflation has enhanced the appeal of emerging market assets, including those in South Africa. This trend has been accompanied by lower interest rates in developed markets, which has prompted a global search for higher yields. This has had a favourable impact on the Rand. On the other hand, the decline in demand for South African exports like coal and platinum has exerted downward pressure on our currency. The Rand’s performance is closely tied to commodity exports, and the weakening of coal and platinum markets has led to decreased export earnings.

A strong Rand’s wishlist: what needs to be done to strengthen the Rand in the second half of 2025?

Topping the list is keeping friction between the ANC, DA and smaller parties in the GNU to a minimum. Strengthening the rule of law and tackling corruption at every opportunity will not only serve to strengthen the Rand, but also to give South Africa the best possible chance of being removed from the Financial Action Task Force Team’s greylist. Another important factor is the maintenance of a stable electricity supply. According to EskomSePush, South Africa has had 201 hours (eight days) of national loadshedding in 2025 – a number that the beleaguered Eskom needs to keep low for the Rand’s sake.

The Rand’s performance is a typical example of an economic force that businesses can’t control. The best way to help your business weather any potential storms is to streamline the factors that are in your control – and that starts with having the right premises. Get in touch with 3Cube Property Solutions if you’re looking for commercial, industrial or retail space in Gauteng or the Western Cape.