South Africa's markets gain momentum as rand strengthens and trade surges

SOUTH Africa's financial markets began the week on a cheerfully optimistic note, buoyed by a weakening US dollar and a fresh wave of stability within the Government of National Unity (GNU).

- SIPHELELE DLUDLA

In early Monday trading, the rand strengthened by 0.5%, recovering to R17.70 against the US dollar, reversing some of the pressure it faced last week.

This upward momentum comes as the greenback continues to lose ground, spurred by an easing of tensions in the Middle East, leading investors to take on more risks rather than retreating to safer havens.

Economic data from the South African Reserve Bank unveiled promising figures: money supply growth rose to 6.86% in May, up from 6.12% in April, along with a modest increase in credit growth to 4.98% from 4.60%. Such indicators provide essential insights into consumer demand, suggesting strengthened economic activity.

Moreover, South Africa's trade performance in May has presented promising figures, with a widening trade surplus of R21.7 billion—up substantially from a revised R13bn in April.

This significant increase was driven by a robust export performance, which saw a 6.3% rise, culminating in a six-month high of R176bn.