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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
September 2, 2025

International Trade and Trade Balance

July 2025

International trade measures South Africa’s demand for foreign goods and services relative to its demand for domestically produced products in global markets. The country mainly exports raw materials, including base metals, gold, other precious metals, and minerals, while importing value-added products such as vehicles, chemicals, and machinery.

In July 2025, South Africa recorded a trade surplus of R20.2 billion, indicating that exports once again surpassed imports for the month. Over the seven months of international trade in 2025, total exports increased modestly by 1.3%, from R1,116.3 billion in 2024 to R1,175.6 billion. Meanwhile, imports declined slightly by 0.1%, from R1,076.6 billion to R1,175.5 billion. This reflects a modest rise in international demand and continued caution among domestic consumers regarding imported goods.

Looking ahead, demand may see slight growth in 2025, supported by a recent 25-basis-point interest rate cut announced at the end of July. Lower interest rates, combined with low inflation, a relatively stable and appreciated Rand against the US dollar, and stable consumer and producer prices, could help boost domestic demand in the coming months.

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More Coverage

Gold and Foreign Exchange

September 2025
The South African International Liquidity Position, measured by Net Gold and Foreign Exchange Reserves, showed growth in both USD and Rand terms for September 2025.

Private Sector Credit Extension (PSCE)

August 2025
In August 2025, credit demand grew by 5.9%, slightly below the anticipated market prediction of 6.0% for the month. Since the initiation of interest rate cuts in September 2024, there has been a noticeable acceleration in overall credit growth, with most subcategories showing increases, particularly in July.

Internation Trade and Trade Balance

August 2025
International trade measures South Africa’s demand for foreign goods and services relative to its demand for domestically produced products in the global market.

The Rand’s Journey Against the Dollar in 2025

Unpacking the Undervaluation and Economic Implications
As of October 2025, the South African Rand is trading at R17.15 against the US Dollar, a significant figure in the context of an estimated average exchange rate of R18.20 from January to September 2025. Market analyses leveraging the Purchase Power Parity (PPP) exchange rate – calculated using inflation differentials between South Africa and the US from 2020 to 2025 – indicate that the Rand remains undervalued. This disparity suggests an alignment closer to R14.30 in a conservative estimation and potentially as low as R11.30, revealing a risk premium embedded in the current forex dynamics.

Unlocking South Africa’s Potential

Bold and Radical Shift in Policies are required.
South Africa’s economy recorded modest growth of just 0.8% during the second quarter of 2025, continuing a pattern of sluggish expansion that has persisted over the past decade. With the economy still struggling to break free from its constraints, serious reforms and strategic policy adjustments are essential if South Africa is to achieve sustainable growth rates significantly higher than the current 0.8% average.
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