The Rand should be at R11.30 to the US dollar

South Africa’s rand is significantly undervalued, trading around R17.15/USD versus a fair value estimated between R11.30 and R14.30/USD. This discrepancy reflects a large risk premium driven by domestic economic policies—such as black economic empowerment (BEE) and expropriation without compensation—rising government debt, and strained international relations, particularly with the United States.

These factors have led to punitive US tariffs of up to 30% on South African exports, particularly in the automotive and agricultural sectors, and cast doubt on the country’s continued access to the African Growth and Opportunity Act (AGOA), which allows for duty-free exports to the US.

“As of October 13, 2025, the exchange rate for 1 US dollar (USD) is approximately 17.30 South African rand (ZAR). This rate reflects a slight decrease from the previous day’s close of 17.50 ZAR per USD”

The economic consequences are evident in declining foreign investment—R165 billion in JSE-listed shares sold by non-residents in the first eight months of 2025—rising unemployment (229,000 jobs lost from June 2024 to June 2025), and sector-specific disruptions, including major job cuts in automotive and manufacturing.

A weakened rand and ongoing economic missteps could drive inflation higher, reduce growth, and further depress the currency, creating a cycle of economic vulnerability and reduced competitiveness in key export markets.

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