Waiting for the other shoe to drop. Forecasts for growth have been slashed, so why does the rand keep getting stronger?

Unfortunately, we are indeed living in interesting times. April's market madness had analysts and investors scrambling for purchase. Is this the end of dollar hegemony? Or just a market correction? How serious is US President Donald Trump about these tariffs? What does the sudden entente between China and the US mean?

In among the chaos, the rand has strengthened considerably against the dollar, even as the longer-term economic and political outlook has cratered. But why is the rand defying gravity and is this magic trick sustainable?

SA's (serious) external and domestic risks

The global economy has had a rough month. Trump's aggressive approach, most notably the "reciprocal tariffs" he announced on 2 April 2025 ("Liberation Day" apparently) led to the International Monetary Fund (IMF) slashing its global growth forecast, down to 2.8% from the 3.3% projection in January.

While the impact of Trump's attempt to reshape international trade will be felt globally, there's growing concern over its impact in South Africa. When the IMF cut the global growth forecast in April, it also took aim at South Africa's...