Rand under pressure as Trump’s tariffs bite

South Africa’s currency extended losses against the dollar after the current account-deficit widened more than expected in the second quarter, as the rand value of exports decreased amid lower volumes and the terms of trade worsened. 

The gap on the current account — the broadest measure of trade in goods and services — expanded to an annualised 1.1% of gross domestic product, or R82.8 billion, in the three months through June, from a revised 0.6% in the prior quarter, the South African Reserve Bank said in a statement Thursday.

That was below the median estimate of eight economists in a Bloomberg survey, who projected a 0.7% deficit.

The rand traded 0.4% weaker against the dollar at 17.55 at 12:07 a.m. in Johannesburg.   

The trade surplus narrowed to R177.1 billion from R211 billion in the previous period, as the value of exports of goods and services decreased more than that of merchandise imports.

The decrease in the value of exports was largely due to a drop in mining and agricultural shipments, the central bank said in a response to emailed questions.

“The value of mining exports was mainly weighed down by decreased exports of base metals, especially ferrochrome, as well as pearls and precious stones,” the bank said.

“The decrease in the value of agricultural exports mainly reflected the lower export value of vegetable products, particularly maize.”

The value of exports of goods and services in the second quarter decreased by R23.3 billion, reflecting lower volumes, while that of imports increased by R8.2 billion on the back of higher prices, the Reserve Bank said.

South Africa has now posted a seventh successive shortfall on its current account, which comes amid increasing trade frictions from tariffs imposed by the US on its trading partners. Last month, President Donald Trump slapped a 30% levy on South African exports to the US.

Early indications suggest South Africa’s exports may have improved this quarter due to increased shipments in mining, manufacturing and agricultural products, and a rise in the value of mineral products like copper, aluminium, manganese and chrome.

The deficit on the services, income and current transfers account grew to 259.9 billion rand in the second quarter, from a previous R258.9 billion.

“The wider deficit emanated from a larger income account deficit, while the shortfall on the services and current transfer accounts narrowed,” the bank said.

“South Africa’s terms of trade, including gold, deteriorated in the second quarter of 2025 as the rand price of imported goods and services increased more than that of exports.”