The South African rand appreciated by almost 0.5% versus the US dollar on March 5, 2025, and was trading at 18.37.

The recent tariff measures imposed by U.S. President Donald Trump triggered a decrease in the value of the U.S. dollar, prompting global markets to react by appreciating the dollar.

U.S. tariffs recently imposed on imports from countries including Mexico, Canada, and China prompted retaliation and heightened concerns of a global trade war.

These developments have increased the volatility of currency markets, prompting investors to seek for more stable assets.

The rand’s rise in value in South Africa was influenced by both external and internal economic forces. The Purchasing Managers’ Index (PMI) showed that business activity continued to fall in February, but at a slower rate than in previous months.

Market participants are now focusing on the next national budget, which has been delayed but is expected to resolve the country’s urgent fiscal problems.

Despite the rand’s recent gains, experts caution that the currency, along with others in the emerging market category, might be vulnerable to the continued uncertainty in the global economy.

A worldwide economic slowdown due to increasing trade conflicts may reduce demand for risky investments.