South African Rand Drops Vs. USD Amidst GDP Growth Upgrade
The South African rand (ZARUSD) dropped versus the US dollar at the forex market in early Thursday trade ahead of the release of domestic economic indicators and US consumer inflation data due later in the day.
ZAR was trading at 17.52 against the U.S. dollar, according to updated forex market data, declining by 0.3% from Wednesday’s close.
The South African Reserve Bank publisheded second-quarter current account data which show the deficit widened to 1.1% of gross domestic product (GDP) in the second quarter of 2025, from a revised 0.6% deficit in the first quarter.
The country current account deficit widened amidst concerns over higher U.S tariffs which analysts estimate would cost South Africa huge exports receipts.
The nation’s GDP grew at its fastest pace in two years during the second quarter, driven by a rebound in the manufacturing and mining sectors.
The continent’s largest economy grew 0.8% in the three months to June, compared with the previous quarter. The growth was larger than the 0.6% median estimate of 13 economists surveyed by Bloomberg.
Goldman Sachs raised its 2025 gross domestic product growth forecast for South Africa to 1.2%, from 1%, following what it referred to as an “upside surprise”.
David Omojomolo, Africa economist at Capital Economics, wrote in a note: “We expect further modest GDP growth over the coming quarters, helped by lower interest rates and easing structural constraints.”
However, Washington’s imposition of a 30% tariff on South African goods, the highest rate in sub-Saharan Africa, is expected to affect economic performance from the third quarter onwards.
President Cyril Ramaphosa said on Tuesday that Pretoria has sent officials to the US to prepare for a fresh round of trade negotiations, its latest attempt to strike a deal with the Trump administration. #South African Rand Drops Vs. USD Amidst GDP Growth Upgrade AIICO Insurance Targets N19.55 billion Profit for FY2025
