Rand Stays Flat Despite Dollar Slide, Leaving South African Investors Disappointed

South Africans hoping to cash in on the US dollar’s dramatic decline this year are facing an unexpected reality—the rand has barely moved, nullifying any potential windfall. Although the greenback has lost around 10% against major currencies like the euro and pound since the start of 2025, the rand has not kept pace. In fact, the exchange rate between the rand and dollar remains nearly unchanged year-on-year, currently hovering above R18 to the dollar.

Currency Performance: A Missed Opportunity

Calculations show that a R10,000 investment made a year ago would have yielded:

• R555.67 (5.6%) in returns if converted to euros

• R405.12 (4.1%) if placed in British pounds

• Negative returns if converted into US dollars, despite the dollar’s global slide

This lack of movement means that South African investors who bet on the dollar have seen no real gains, even as global peers benefit from the dollar’s weakening.

Why the Rand Didn’t Gain

Currency strategist Andre Cilliers of TreasuryONE attributes the rand’s sluggishness to a combination of geopolitical tensions and uncertainty in US foreign policy—particularly fears of possible military action against Iran. Speculation around US President Donald Trump’s stance on supporting Israel has added to investor caution.

Furthermore, while the Federal Reserve has held interest rates steady throughout 2025, Trump’s repeated calls for rate cuts and the economic effects of ongoing tariffs have pressured the dollar globally, but not enough to benefit the rand.

Historical Context

According to Bloomberg data, the last time the dollar experienced a drop of this magnitude was in 2010, amid aggressive US monetary stimulus following the 2008 Global Financial Crisis.

Bottom Line

Despite global dollar weakness, the rand remains stuck, offering no real gains for South African investors betting on the greenback. Instead, euro and pound investments have quietly outperformed, highlighting the importance of diversified currency strategies in uncertain times.

Source: African Publicity