The South African rand weakened in early trading on Thursday as investors prepared for the release of the country’s first-quarter current account data, a key indicator of the nation’s external economic balance.
By 0551 GMT, the rand traded at 17.8425 against the US dollar, declining about 0.2% from Wednesday’s closing levels. Market participants are awaiting the South African Reserve Bank’s report due at 0900 GMT, which analysts predict will reveal a widening current account deficit.
According to a Reuters survey, economists forecast the deficit will widen to 0.9% of gross domestic product, up from the 0.4% shortfall reported in the previous quarter. Nedbank economists have echoed this outlook, attributing the expected deterioration to a slowdown in export growth coupled with rising import demand.
In a recent research note, Nedbank analysts said the trade surplus is likely to have contracted in the first three months of 2025 due to these trends. They also pointed to a worsening non-trade deficit, explaining that increased income payments abroad outpaced income receipts, adding pressure on the current account.
Meanwhile, the country’s benchmark 2035 government bond showed modest gains in early trade, with yields falling 0.9 basis points to 9.991%. This slight yield drop indicates a cautious but steady demand for South African debt amid currency volatility.
As the market awaits the official figures, attention remains focused on how South Africa’s external accounts will influence the rand’s performance and investor confidence going forward.