RAND STRENGTHENS ON BETTER-THAN-EXPECTED MINING PRODUCTION FIGURES

The South African rand strengthened on Tuesday following the release of better-than-expected local mining production figures and rising inflation data from the US. The rand was trading at 17.7775 against the dollar, marking a 0.7% increase from Monday’s close.

According to Statistics South Africa, the country’s mining output rose by 0.2% year-on-year in May, compared to a decline of 7.7% in April. Analysts noted that despite these minor improvements, logistics continues to pose a significant challenge to production, especially in the current environment of subdued commodity prices and weak demand.
As of Wednesday, July 16, the rand was trading at R17.88 to the dollar, R23.95 to the pound, and R20.78 to the euro. Oil prices were slightly lower at $768.98 a barrel.

In other news, Minister in the presidency, Khumbudzo Ntshavheni, highlighted the potential risk of a coup in South Africa, but assured that no recent attempts had occurred and that intelligence agencies were monitoring suspected networks. “No recent attempts had occurred, that intelligence agencies were monitoring suspected networks, and that measures had been put in place to mitigate this risk,” she said.

Meanwhile, Electricity and Energy Minister Kgosientsho Ramokgopa warned that the ongoing issues with municipal debt owed to Eskom will result in the total collapse of the South African electricity complex if left unaddressed. The cumulative debt currently stands at just under R100 billion.

The Minister of Transport, Barbara Creecy, has dissolved the board of the Road Accident Fund (RAF) due to ongoing governance and operational issues that have severely hindered the RAF’s ability to fulfil its statutory responsibilities.
South African central bank chief Lesetja Kganyago noted that dollar depreciation due to US tariffs and deflation in China are clouding the outlook for inflation locally ahead of a rate-setting meeting at the end of the month.