JOHANNESBURG (Reuters) -South Africa’s rand stumbled on Thursday on global market jitters while stocks jumped, as investors digested U.S. President Donald Trump’s announcement of an immediate 90-day tariff pause for many countries.
At 1703 GMT, the rand traded at 19.5125 against the U.S. dollar, about 1% weaker than its previous close. The dollar last traded about 1.7% weaker against a basket of currencies.
The rand hit a record low of 19.9325 on Wednesday when Trump’s country-specific import tariffs kicked in. The duties sparked the most intense episode of financial market volatility since the early days of the COVID-19 pandemic.
The local currency rebounded after Trump temporarily lowered tariffs imposed on dozens of countries including South Africa on the same day but kept a 10% blanket duty on almost all U.S. imports.
The rand has weakened about 2% against the greenback this week.
IG senior market analyst Shaun Murison said that despite the local currency’s short-term recovery, its long-term trajectory remains one of depreciation.
“While we welcome the temporary relief provided by the tariff pause, we remain cautious about the rand’s future performance until there’s greater clarity on both international trade policies and South Africa’s internal political stability,” Murison said.
In addition to Trump’s tariffs, local politics have weighed on the risk-sensitive rand, after a contentious budget vote last week threatened the future of the ruling coalition.
The second-biggest party in the coalition, the pro-business Democratic Alliance, voted against important but contested legislation in the budget and challenged the budget process in court.
South African stocks rebounded following the tariff pause. The Johannesburg Stock Exchange’s Top-40 index closed about 4.5% higher on Thursday, after closing 2% weaker on Wednesday.
The benchmark 2030 government bond was stronger, with the yield down 7 basis points at 9.235%.
(Reporting by Tannur Anders and Sfundo Parakozov; Writing by Tannur Anders; Editing by Bhargav Acharya, Christopher Cushing and Joe Bavier)
