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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
July 9, 2025

South African

Gold and Foreign Exchange Reserves

May 2025

The South African International Liquidity Position, represented by Net Gold and Foreign Exchange Reserves, increased in USD terms but slightly declined in Rand terms due to the Rand’s appreciation against the Dollar in June 2025. The Rand strengthened by nearly 30 cents against the Dollar in June, following a 60-cent appreciation in the previous month. Reserves rose by approximately $412 million, following a nearly $500 million increase in May 2025. This growth was partly driven by a 40.6% year-over-year increase in gold prices in June 2025 compared to the same month in 2024.

Foreign reserves in Dollar terms also increased from May to June, reflecting the Reserve Bank’s strategy to purchase more Dollars to bolster South Africa’s international liquidity amid current global market uncertainties. This approach is also influenced by the impending expiration of trade tariff exemptions related to “Liberation Day,” which are set to expire on August 1, 2025.

Key commodities such as gold, oil, platinum, and coal provide important insights into South Africa’s mining sector and inflation outlook. These trends will be vital in assessing inflation prospects amid international developments and potential trade restrictions with the US at the end of July.

Monitoring these movements is essential, as inflation expectations will influence the South African Reserve Bank’s (SARB) interest rate decisions later in 2025. A stable Rand and lower oil prices support favourable inflation forecasts. However, ongoing global geopolitical tensions and potential changes to trade agreements like AGOA could lead to rapid market shifts.

With recent US tariffs and the Federal Reserve holding interest rates steady in May 2025, the Rand is expected to experience continued volatility, impacting both international markets and South Africa’s economic outlook for the remainder of 2025.

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More Coverage

South Africa is trapped in severe economic stagnation, facing a projected 1.0% growth rate for 2026, 33.6% unemployment, and sharp contractions in mining (-12.7%) and manufacturing (-4.3%). Exposed to global fuel shocks via depleted reserves and >R12.00/litre pump levies, the nation is also caught in a fiscal spiral where national debt nears 80% of GDP and interest payments exceed R1 billion daily. Escaping this trap requires four urgent structural reforms: halting interest rate hikes for supply-side inflation, replacing rigid B-BBEE quotas with job-creation incentives, scrapping Expropriation Without Compensation (EWC), and deregulating Transnet’s logistics corridors.

Mining Production and Sales for August 2026

South Africa’s mining sector remains a vital source of jobs, foreign exchange and economic growth, but August’s sharp fall in mining output and sales highlights the mounting pressure on the industry. Rising fuel and energy costs, policy uncertainty and growing trade challenges are weighing on producers, even as firm gold prices and temporary US tariff exemptions offer some relief. Read the full report for a closer look at the latest figures, the forces shaping the sector and what they could mean for mining’s future in South Africa.

MACROECONOMIC & INVESTMENT INSIGHTS | OCTOBER 2026

A $100-plus oil price, a weaker rand and record fuel hikes are putting South Africa’s economy under mounting pressure, while strategic reserves offer little protection. This report examines how imported inflation is squeezing households and businesses, why higher interest rates may do little to tackle its root causes, and how sluggish growth and rising debt are tightening the fiscal squeeze. It also explores the stakes for trade with the United States and AGOA, and the policy choices that could restore investor confidence, unlock growth and put the country on a more resilient path.

International Trade and Trade Balance – August 2026

South Africa recorded a trade surplus of R20.4 billion in August 2026, as exports continued to outpace imports. Export growth has exceeded import growth over the first eight months of the year, reflecting subdued domestic demand among businesses and consumers. But with higher fuel prices and tighter monetary policy expected to weigh on spending, demand is likely to recover only gradually. Read the full report for a closer look at the trade figures and what they could mean for South Africa’s economy in the months ahead.

Private Sector Credit Extension (PSCE): August 2026

South Africa’s credit market is showing surprising resilience, with credit demand rising by 7.5% in August 2026 despite renewed interest-rate pressure, elevated inflation and mounting household costs. While mortgage advances continued to grow, the fragile recovery in the property market highlights the strain caused by subdued investment, high debt levels and rising municipal and energy expenses. At the same time, sluggish instalment credit growth and continued reliance on short-term borrowing reveal how consumers are navigating increasingly difficult financial conditions. With higher oil prices, geopolitical risks and further SARB tightening adding to the pressure, this report examines what the latest credit trends reveal about household finances, business confidence and the broader South African economy.