South Africa’s trade surplus widened more than expected to 12 billion rand ($915 million) as exports in precious, base metal and vehicle parts jumped, easing pressure on the economy and lifting the currency.
The South African Revenue Service said in Johannesburg that exports rose by 7.1 per cent on a month-on-month basis to 110 billion rand in June, while imports dipped 0.9 per cent to 98 billion rand.
Commodities led the rise in exports with sales of precious metals up 38 per cent and base metals rising 13 per cent in the month. Sales of vehicles equipment also went up 8 per cent.
Analysts said the large surplus was a sign the current account was narrowing, which would lessen the impact of any reversal of portfolio flows.
“This is the fourth month in row of surpluses so it will definitely reduce the current account deficit in the second quarter,” said senior economist at Nedbank Isaac Matshego.
“But remember, the current account is structural so we really do need those portfolio flows to keep coming in,” Matshego added.
The rand responded to the news of the widening surplus by rising slightly on the data, trading at $1 =13.1350 at 1300 GMT, about 0.2 per cent firmer.
The rand has rallied in the past month to become one of the top performing emerging market currencies, due mainly to positive turn in sentiment, but analysts warn it remains at risk to offshore events, particularly the ongoing trade tiff between the United States and China.
Africa’s most industrialised country ran a large current account deficit of 4.8 per cent of GDP in the first quarter.