South Africa’s currency, the rand, remained largely stable on Thursday despite political tension triggered by a controversial encounter between President Cyril Ramaphosa and U.S. President Donald Trump, which took the spotlight away from the country’s 2025 budget announcement.
By 0746 GMT, the rand was trading at 17.965 to the dollar, near its previous day’s close and hovering close to a five-month high. Traders and analysts said markets were trying to digest the fallout from the unexpected developments in Washington, which added uncertainty to investor sentiment.
Finance Minister Enoch Godongwana had earlier presented the national budget in Parliament on Wednesday for the third time, after twice withdrawing it due to backlash over his now-abandoned plan to increase value-added tax (VAT). The revised budget retained the government’s focus on stabilising debt, boosting infrastructure, and avoiding new tax burdens on consumers.
However, the budget quickly fell out of the headlines when attention shifted to Ramaphosa’s visit to the White House, which had been billed as an opportunity to reset U.S.-South Africa relations following months of strained ties.
Trump, who had earlier suspended U.S. aid to South Africa over concerns about its land reform policies and its genocide case against Israel at the International Court of Justice, reportedly used the Oval Office meeting to accuse South Africa of seizing land and overseeing attacks on white farmers—claims that have been widely debunked and labelled as false.
President Ramaphosa, according to aides, pushed back firmly during the meeting, defending South Africa’s land reform efforts as peaceful and constitutional. “Our conversation was frank,” Ramaphosa said at a press briefing afterwards. “We agreed to continue dialogue, especially around critical minerals and trade.”
He confirmed that the two nations would begin discussions on critical mineral exports, which are key to the global green energy transition, but did not elaborate. In a parallel announcement, South Africa’s Trade Minister revealed that a proposal to buy liquefied natural gas (LNG) from the U.S. had been submitted as part of a broader trade and investment pitch.
Despite the drama in Washington, the currency market showed restraint. “One hopes that more constructive talks around trade and bilateral relations took place behind closed doors, but as yet, there have been no updates,” said Andre Cilliers, a currency strategist at TreasuryONE.
In the local equities market, the Top-40 index declined by around 0.7%, while South Africa’s 2030 government bond weakened, with the yield rising 2 basis points to 8.90%.
The timing of the political incident has added complexity to a critical period for South Africa, as it seeks to attract international investment and balance fiscal discipline with social needs ahead of upcoming national elections.
Economists say the longer-term impact on investor confidence will depend on whether the Ramaphosa administration can maintain economic stability while navigating tricky geopolitical waters.
