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Standard Bank Group
South Africa FX 03 September 2025

FX Monthly Chart Book

Shireen Darmalingam

  • The rand ended August stronger, at R17.65/$, from R18.19/$ in July. This translates into a 3.0% gain. It was also stronger against both the euro and the pound, gaining 0.7% and 0.9% respectively. It traded in a wide range of R17.43/$ – R18.36/$ in August. Emerging market currencies largely gained ground against the dollar in August: the COP, HUF, BRL, ZAR and CZK were amongst the best-performing EM currencies and the TWD, TRY, RUB, INR, and IDR were the worst-performing.
  • The rand’s positive performance in August can be attributed partly to risk-on global sentiment, as markets increasingly priced in a higher probability of a US Fed rate cut in September. This supported the rand, despite new headwinds from a 30% tariff imposed on SA exports to the US. Encouragingly, existing exemptions on SA exports remain in place, helping to limit the overall impact of tariffs. The agricultural and automotive sectors are expected to bear the brunt of the new duties. Negotiations are ongoing, and there is still a possibility that South Africa could reach a trade deal with the US, potentially reducing the tariff rate.
  • Looking ahead, investors are closely monitoring signals from major central banks, including upcoming monetary policy announcements from the Fed, ECB and BOE later this month. Locally, attention is also turning to developments in SA’s monetary policy framework. Finance Minister Enoch Godongwana and SARB Governor Lesetja Kganyago issued a joint statement this week reaffirming the importance of low and stable inflation. At its July MPC meeting, the SARB reiterated its preference for CPI to remain anchored near the lower end of the 3–6% target range. Similarly, National Treasury’s 2024 Macroeconomic Policy Review recognised that low and stable inflation supports economic growth and concluded that monetary policy objectives have largely been met.
  • To assess the appropriateness of the current inflation target, the Macroeconomic Standing Committee (MSC) is conducting a detailed review. The statement emphasised that macroeconomic policy decisions will remain evidence-based, including any potential adjustments to the inflation target. The MSC is expected to submit formal recommendations to both the Minister and the SARB Governor. Should changes be agreed upon, Minister Godongwana will make a formal announcement at the earliest appropriate opportunity, helping to anchor inflation expectations effectively.
  • We see the rand averaging R18.02/$, R20.42/€ and R23.90/£ in 2025. 
 

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