The South African rand has hit an all-time low against the British pound sterling. As of April 3rd, 2025, one British pound costs a total of R24.73 .
This follows the South African National Assembly’s approval of a controversial budget, which passed without backing from the DA or FF Plus—both key members of the Government of National Unity (GNU), says the Daily Investor.
One of the primary triggers for the currency’s slide was the National Assembly’s approval of a controversial budget. The budget, which includes a proposed increase in value-added tax (VAT), was passed without the support of two key members of the Government of National Unity—the Democratic Alliance (DA) and the Freedom Front Plus (FF Plus).
This controversial budget decision relates to Finance Minister Enoch Godongwana’s decision to hike VAT prices by 1% over the next two years. A decision that the DA deemed as a betrayal of the South African people
The DA’s opposition to the recently passed budget, particularly the VAT increase, has strained its role in the Government of National Unity (GNU). While not officially withdrawn, the party is reconsidering its position, raising concerns about political instability. Investors fear that a DA exit could weaken the GNU, hinder economic reforms, and further destabilise the rand.
Adding to the economic pressure, U.S. President Donald Trump has announced a new round of global tariffs, including a 30% tariff on South African exports. This move has raised fears about South Africa’s trade prospects and economic stability, further weighing on the currency. These tariffs will come into effect as of the 9th of April 2025.
The combination of political divisions, investor concerns, and international trade pressures has driven the rand to its weakest level in history against the British pound, sparking renewed worries about the country’s financial future.
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