South Africa’s rand remained largely unchanged in early trading on Wednesday as the country worked under growing pressure to secure its place in a key U.S. trade agreement before the August 1 deadline.
By 0705 GMT, the rand was trading at 17.8550 against the U.S. dollar, showing little movement from its previous close, according to Reuters.
The South African government is still waiting on a response to its latest proposal aimed at preserving access to the African Growth and Opportunity Act (AGOA), Washington’s main trade program for sub-Saharan Africa.
The offer reportedly includes pledges to buy U.S. liquefied natural gas, reduce restrictions on American poultry imports, and invest $3.3 billion in U.S. industries such as mining and infrastructure.
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Meanwhile, the U.S. dollar stayed on the softer side against a group of major currencies as investors awaited the Federal Reserve’s upcoming decision on interest rates, which could offer clues about the central bank’s next policy moves.
Back home, South Africa’s central bank is set to announce its own interest rate decision on Thursday, with many economists expecting a 25-basis-point cut.
In the bond market, the benchmark 2035 government bond gained slightly, with the yield dipping 3.5 basis points to 9.785%.
Around this time last year, the rand had its longest winning streak in 13 years.
As recently as last month, it was among the eight strongest currencies across Africa.
The African Development Bank (AfDB) projects that 25 African countries will see their currencies strengthen in 2025, reflecting a cautiously positive outlook for macroeconomic conditions across the continent.
However, nearly half of Africa’s currencies are still expected to lose ground against the U.S. dollar due to ongoing geopolitical risks and economic challenges at home.
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Image Credit: Engineering News
