Why the rand remains resilient despite Donald Trump

Stephen Grootes interviews Isaah Mhlanga, Chief Economist at Rand Merchant Bank.

Listen below:

Despite global uncertainty surrounding tariffs and potential instability, the rand has been holding its own against the dollar, which is somewhat surprising given the circumstances.

Mhlanga attributes this to the resilience the South African economy has built over the past year.

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He notes that confidence has significantly improved compared to a year ago.

He adds that South Africa 'stands strong relative to other emerging markets', making it an attractive option for investors. 

"That confidence makes investors, local and offshore, look at South Africa in a different way."

- Isaah Mhlanga, Chief Economist – Rand Merchant Bank

Reflecting on Trump's first term, Mhlanga points out the global realignment, with a notable example being the decline in China's exports to the US.

He adds that Trump's current presidency has the potential to reshape global trade dynamics.

As a result, Mhlanga suggests the US could find itself isolated if other nations adjust their trade practices to mitigate the risks associated with policies likely to persist for the next four years.

However, he says there will always be a role for the US on the global stage, given that it represents a quarter of the global economy.

"For now, the global economy is exposed to US risks, but they will continue to de-risk as much as they can, as we've seen in the first Trump presidency."

- Isaah Mhlanga, Chief Economist – Rand Merchant Bank

Scroll up to the audio player to listen to the interview.