Rand fights for stability amid GNU instability and China, US trade war

JOHANNESBURG - The rand continues to be a casualty of war as instability in the Government of National Unity (GNU) persists and the escalation in the trade war between China and the US erases minor gains.

The domestic currency remains above the R19 mark, sparking fears it could reach lows last seen in 2023.

It’s currently trading 7% weaker than a week ago, when US President Donald Trump sent global markets into freefall with an announcement on universal tariffs on all imports.

Before Wednesday’s trade opened at the Johannesburg Stock Exchange (JSE), the rand had weakened to R19.82.

This puts it at arm's length from the lows of R19.90 last seen in 2023.

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Barely able to recover from the onslaught of the tariffs imposed by Trump last week, the African National Congress (ANC)'s announcement to push the restart button on the GNU is expected to add to market volatility.

Trump slapped a baseline tariff of 10% on all imports into the US and heftier tariffs on countries he claims have shortchanged the US in terms of trade.

After the "liberation day" tariffs, China has been slapped with additional tariffs that now amount to 104%.

The rand has recovered marginally between R19.63 and R19.7, and emerging market currencies hit by the sweeping tariffs may take some time to fully recover.

This has seen investors dumping riskier stocks for safe havens.