South Africa's net international investment position declines to R1.99 trillion
South Africa's positive net international investment position (IIP) decreased to R1 988 billion at the end of December 2025 from a revised R2 362 billion in September. This decline was primarily driven by increased foreign liabilities and a slight decrease in foreign assets.
Valuation effects reshape IIP
The overall decline in South Africa's net IIP during the fourth quarter of 2025 was largely influenced by price valuation effects.
Foreign liabilities saw a notable increase, mainly due to a 7.3 percent rise in the FTSE/JSE All-Share Index (Alsi).
Concurrently, the appreciation of the rand, reflected by a 3.7 percent increase in the nominal effective exchange rate (NEER), had a larger negative impact on foreign assets compared to foreign liabilities.
This combination of market gains boosting liabilities and currency strength reducing asset values contributed significantly to the shift in the net position.
The net IIP, as a ratio of annual gross domestic product (GDP), decreased from 31.3 percent in September to 26.0 percent in December 2025.
Mixed movements in foreign assets and liabilities
The market value of South Africa's foreign assets marginally declined by 0.1 percent to R10 314 billion, with decreases in direct and other investment assets largely offset by increases in portfolio investment, financial derivatives, and reserve assets.
Portfolio investment assets benefited from rising foreign share market indices, including a 2.3 percent increase in the S&P 500 Index.
Reserve assets were augmented by US$3.5 billion from international bond issuances by the national government and an increase in the gold price.
Conversely, foreign liabilities increased by 4.5 percent to R8 325 billion, with direct and portfolio investment liabilities rising due to valuation effects from the Alsi and further international bond issuances by the national government.
Other investment liabilities saw a decrease due to repayments of short-term loans by the domestic private non-banking sector.
A shift in external financial resilience
The reduction in South Africa's net international investment position, particularly its fall to 26.0 percent of GDP, signals a notable shift in the country's external financial resilience.
While largely influenced by market valuation effects and currency movements, this trend warrants close monitoring as it impacts the nation's capacity to absorb external shocks.
Sustaining a robust net IIP is crucial for long-term economic stability, especially given the ongoing need for foreign capital inflows and managing external debt dynamics.