Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd

April 7, 2025

South African

Gold and Foreign Exchange Reserves

March 2025

The African International Liquidity Position, indicated by Net Gold and Foreign Exchange Reserves, experienced growth in both U.S. dollar and Rand terms as of March 2025.

Although the Rand appreciated slightly against the dollar, the value of reserves in both currencies increased during the month. Additionally, gold reserves rose in both Rand and dollar terms, largely due to a 9.0% monthly rise in gold prices; the dollar price remains 41.2% higher compared to the same period in 2024.

Foreign exchange reserves also saw a significant increase from December 2024 to March 2025, despite a slight depreciation and volatility of the Rand following the re-election of former President Trump and subsequent diplomatic tensions between Pretoria and Washington. Key commodities for South Africa, including gold, oil, platinum, and coal, provide valuable insights into the mining sector, fuel prices, and potential inflation. Monitoring these trends is essential, as inflation expectations will influence the South African Reserve Bank’s Monetary Policy Committee (MPC) in its interest rate decisions later in 2025.

A stable Rand and consistent oil prices support favourable inflation expectations and may impact future interest rate decisions later in 2025. However, circumstances could change rapidly due to ongoing international developments and diplomatic tensions between South Africa and the U.S.

Considering the recent introduction of new tariffs by the Trump administration, it is likely that the Rand will experience continued softness and volatility in the coming weeks, influenced by the effects on international markets observed in recent days.

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Manufacturing Production

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