By Sfundo Parakozov
JOHANNESBURG (Reuters) -South African assets fell further on Friday as investors worried about the impact of U.S. President Donald Trump’s sweeping tariffs and the future of South Africa’s coalition government.
At 1511 GMT, the rand traded at 19.0175 against the dollar, down about 1.5% on Thursday’s closing level.
The South African currency has fallen more than 3% against the dollar this week, with bigger losses against currencies like the euro and pound.
Trump’s 10% baseline tariff on all imports to the United States and higher duties for dozens of countries like South Africa, has sent shockwaves through markets.
Investors have dumped riskier currencies like the rand and sought safety in assets like bonds and gold, fearing that a full-blown trade dispute could trigger a sharp global economic slowdown and fuel inflation.
The tariffs could hurt South Africa’s economy by denting exports like vehicles and auto parts, metals and citrus fruit.
Johann Els, chief economist at Old Mutual, said that more volatility was expected in the days and weeks ahead before the rand settled back in a stable territory.
An added worry for South Africa-focused investors is that the pro-business Democratic Alliance (DA) party could leave the coalition government after a dispute over the budget.
The DA voted against the budget’s fiscal framework and revenue proposals in parliament this week after failing to reach an agreement with the biggest party in the coalition, the African National Congress (ANC).
It is now considering its future in the coalition, with some in the ANC also pushing for it to exit government.
Johannesburg-listed stocks and government bonds also fell on Friday.
The local bourse’s Top-40 index closed down about 5.4%, while the yield on the benchmark 2030 government bond rose 18.5 basis points to 9.41%.
(Additional reporting by Bhargav Acharya;Editing by Alexander Winning, Elaine Hardcastle and David Evans)
