If you are planning to transfer funds overseas within the next few days or weeks, no one will blame you for losing sleep over the weakened South African rand and heightened market volatility.
Shortly after President Donald Trump on 2 April 2025 announced aggressive reciprocal import tariffs on products from about 100 countries into the USA, world stock markets experienced stark drops in indices and many currencies reacted negatively.
A record low
Just a few days ago the local currency hit a record low of R19.93/US$ in reaction to the tariff announcements by the White House. This is the same weak levels as in June 2023 when South Africa battled worsening load-shedding, and tension between South Africa and the US flared up after America alleged South Africa had supplied arms to Russia.
Roughly calculated, at this weak level R5 million would buy you US$250,878 (without fees charged by service providers). At the stronger level of R19.40 to the US dollar, you will have about US$257,730 after conversion, but before fees are deducted.
Big commercial banks may deduct a further US$7,730 from the amount of US$257,730, while those who offer better and more competitive forex fees, will leave you with 40% more in your pocket converting the R5 million.
An uphill battle
Although the South African Rand recouped some losses on 11 April 2025 after President Trump declared an immediate 90-day tariff pause for many countries, the ZAR is still fighting an uphill battle, leaving many wondering what to do if they have to move funds abroad soon.
Cherylene Hogan, a Key Accounts Manager at Africorp Treasury, a licensed financial intermediary specialising in foreign banking and cross-border payments, says clients who can postpone offshore transfers, should consider placing funds in an interest-bearing account with immediate liquidity.
The exchange rate is a significant consideration for South African residents investing abroad, expatriates transferring funds after asset liquidation, and South African entities remitting capital. Transfer regulations vary between tax residents and non-residents, and in many cases, approval from the South African Revenue Service (SARS) to transfer money abroad, is required for tax and exchange control compliance.
