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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
August 11, 2025

South African

Gold and Foreign Exchange Reserves

July 2025

The South African International Liquidity Position, indicated by Net Gold and Foreign Exchange Reserves, declined slightly in both USD and Rand terms for July 2025. The Rand strengthened by 10 cents against the US Dollar in July, following a 30-cent appreciation in the previous month. Reserves decreased by approximately USD 73 million, after nearly a USD 400 million increase in June 2025. The high gold price continued to positively influence reserves for July, with gold remaining 36.3% higher than the same month in 2024.

In USD terms, foreign reserves also saw a marginal decline in July compared to the previous month. The Reserve Bank continued purchasing US Dollars on the open market to bolster South Africa’s international liquidity amidst ongoing global market uncertainties. This strategy is also influenced by the upcoming expiry of trade tariff exemptions linked to “Liberation Day,” which were due to expire on 7 August 2025. At that point, 30% tariffs on South African exports to the US would be implemented.

Key commodities such as gold, oil, platinum, and coal offer valuable insights into South Africa’s mining sector and inflation outlook. These trends will be critical in assessing inflation prospects, considering international developments and potential trade restrictions with the US following the August tariff measures.

Monitoring these movements is vital, 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 more favourable inflation forecasts. However, ongoing global geopolitical tensions and potential changes to trade agreements, such as the African Growth and Opportunity Act (AGOA), could result in market volatility.

With recent US tariffs and the Federal Reserve holding interest rates steady again in July 2025, the Rand is likely to experience continued volatility in the short term, 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.