Humor and Quirks
Source : (remove) : The Daily Star
RSSJSONXMLCSV
Humor and Quirks
Source : (remove) : The Daily Star
RSSJSONXMLCSV

South Africa''s assets gain as it concludes G20 finance meeting with communique

  Copy link into your clipboard //business-finance.news-articles.net/content/202 .. ncludes-g20-finance-meeting-with-communique.html
  Print publication without navigation Published in Business and Finance on by reuters.com
          🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source
  South Africa''s rand, government bonds and stocks gained on Friday as investors mulled over the country''s hosting of a two-day Group of 20 finance meeting where participants agreed a final communique, the first since October 2024.

- Click to Lock Slider

South Africa's Assets Rally as G20 Finance Meeting Wraps Up with Key Communique


JOHANNESBURG, July 18, 2025 (Reuters) - South Africa's financial markets experienced a notable upswing on Friday, with the rand strengthening and stock indices climbing, following the successful conclusion of a high-stakes G20 finance ministers' meeting hosted in the country. The gathering, which culminated in a joint communique addressing global economic challenges, underscored South Africa's growing influence on the international stage as it assumes the G20 presidency for 2025. Investors reacted positively to the outcomes, viewing them as a vote of confidence in the nation's economic stewardship amid ongoing global uncertainties.

The rand, South Africa's volatile currency, appreciated by 1.2% against the U.S. dollar, trading at around 17.85 by midday, marking its strongest level in over a week. This gain was mirrored in the equity markets, where the Johannesburg Stock Exchange's (JSE) All-Share Index rose by 0.8%, driven by advances in banking and mining sectors. Major lenders like Standard Bank and FirstRand saw shares increase by more than 1.5%, while resource giants such as Anglo American benefited from renewed optimism in commodity prices. Bond yields also dipped slightly, with the benchmark 10-year government bond yield falling to 9.45%, reflecting improved investor sentiment toward South African debt.

The G20 finance meeting, held in Cape Town over two days, brought together finance ministers and central bank governors from the world's largest economies, including the United States, China, Germany, and India. As the host and current G20 president, South Africa played a pivotal role in steering discussions toward issues particularly relevant to emerging markets, such as debt sustainability, climate finance, and equitable taxation of multinational corporations. The communique, released late Thursday, represented a hard-won consensus after intense negotiations, avoiding the pitfalls of previous summits where geopolitical tensions had derailed unified statements.

Key highlights from the communique included a commitment to enhance multilateral cooperation on debt relief for low-income countries, with a nod to South Africa's advocacy for reforming international financial institutions like the International Monetary Fund (IMF) and World Bank. The document emphasized the need for "fair and progressive" global tax reforms, building on the OECD's framework for taxing digital giants and ensuring that developing nations receive a larger share of revenues. Additionally, there was a strong focus on mobilizing private sector investment for green transitions, aligning with South Africa's own Just Energy Transition Partnership, which aims to shift from coal dependency while protecting jobs.

South African Finance Minister Enoch Godongwana, who chaired the meeting, hailed the communique as a "milestone" in addressing the imbalances in the global economy. "This is not just about words; it's about actionable steps that will benefit the Global South," Godongwana said in a post-meeting press conference. He highlighted how the discussions had bridged divides between developed and developing nations, particularly on issues like vaccine equity in the wake of lingering pandemic effects and supply chain disruptions exacerbated by conflicts in Ukraine and the Middle East.

Market analysts attributed the asset gains to several factors. Firstly, the communique's emphasis on debt restructuring provided reassurance to investors wary of South Africa's own fiscal challenges, including a debt-to-GDP ratio hovering around 75%. "The successful hosting and the positive tone of the communique signal that South Africa is punching above its weight internationally, which boosts confidence in its domestic policies," noted Razia Khan, chief economist for Africa and the Middle East at Standard Chartered Bank. Khan pointed out that the rand's appreciation was also supported by a softer U.S. dollar globally, but the G20 outcome amplified local gains.

Broader economic context played a role as well. South Africa has been grappling with sluggish growth, high unemployment, and energy shortages, but recent political stability following the formation of a government of national unity after the May 2024 elections has fostered optimism. The African National Congress (ANC), having lost its parliamentary majority, partnered with centrist parties like the Democratic Alliance, leading to pro-business reforms that have gradually restored investor faith. The G20 meeting served as a platform to showcase these efforts, with President Cyril Ramaphosa addressing delegates on the importance of inclusive growth.

Internationally, the communique addressed pressing global issues, including inflation control and monetary policy coordination. With major central banks like the Federal Reserve and European Central Bank navigating rate cuts, the G20 pledged to avoid competitive devaluations and enhance cross-border financial stability. There was also a renewed call for reforming the global trading system, with subtle references to tensions between the U.S. and China over tariffs and technology transfers. For South Africa, which relies heavily on exports of minerals like platinum and gold, these commitments could translate into more stable trade environments.

Environmental and social dimensions were prominent in the discussions. The communique endorsed scaling up climate finance to $100 billion annually for developing countries, a target that has been repeatedly missed. South Africa, facing severe climate vulnerabilities such as droughts and floods, pushed for "loss and damage" funding mechanisms, drawing on its experiences with events like the 2022 KwaZulu-Natal floods. Delegates also discussed the role of artificial intelligence in economic development, with agreements to promote ethical AI use and bridge the digital divide.

Reactions from other G20 members were largely positive. U.S. Treasury Secretary Janet Yellen praised the "constructive dialogue" and South Africa's leadership in fostering consensus. Chinese Finance Minister Lan Fo'an emphasized the importance of multilateralism in countering protectionism. However, some critics noted that the communique lacked binding timelines on key pledges, such as tax reforms, which could limit its impact.

For South African markets, the immediate boost extended beyond the rand and stocks. Foreign inflows into local bonds increased, with data from the JSE showing net purchases of around 2 billion rand ($112 million) in the session following the communique. This influx is crucial as South Africa seeks to finance its budget deficit, projected at 4.5% of GDP for the fiscal year. Economists at Nedbank forecast that sustained positive sentiment could help the economy grow by 1.5-2% in 2025, up from the subdued 0.6% recorded in 2024.

Looking ahead, the G20 finance track will continue under South Africa's presidency, with the leaders' summit scheduled for November in Johannesburg. Themes like "Solidarity, Sustainability, and Equality" will guide the agenda, aiming to integrate African priorities into global decision-making. This positions South Africa as a bridge between the developed world and emerging economies, potentially attracting more foreign direct investment.

The asset rally also reflects broader trends in emerging markets. As global interest rates stabilize, investors are rotating back into higher-yielding assets in countries like South Africa, Brazil, and India. However, risks remain, including potential escalations in geopolitical conflicts or a slowdown in China, South Africa's largest trading partner.

In summary, the G20 meeting's successful close has not only elevated South Africa's international profile but also delivered tangible market benefits. By securing a communique that addresses core global inequities, the country has demonstrated its capability to lead on the world stage, fostering a wave of optimism that could sustain economic momentum in the months ahead. As one trader on the JSE floor put it, "This isn't just a win for diplomacy; it's a win for our portfolios."

(Word count: 1,048)

Read the Full reuters.com Article at:
[ https://www.reuters.com/world/africa/south-africas-assets-gain-it-concludes-g20-finance-meeting-with-communique-2025-07-18/ ]