South Africa's net IIP rises to R2.06 trillion

South Africa's positive net international investment position (IIP) expanded from a revised R2 018 billion at the end of December 2025 to R2 060 billion by the end of March 2026.

This increase was primarily driven by a more substantial decrease in foreign liabilities compared to foreign assets.

Foreign liabilities saw a 1.7 percent decline, moving from R8 296 billion to R8 155 billion, while foreign assets decreased by 1.0 percent, from R10 314 billion to R10 215 billion over the same period.

The depreciation of the rand, reflected by a 2.0 percent decrease in the nominal effective exchange rate (NEER) in the first quarter of 2026, exerted a greater valuation impact on foreign assets than on foreign liabilities.

This dynamic underscores the sensitivity of the IIP to exchange rate fluctuations and global market conditions, influencing both outward and inward investment valuations.

Foreign assets declined, primarily from valuation effects on direct and portfolio investments due to lower share prices of dual-listed companies.

This was partially offset by increases in other investment assets, as domestic banks extended short-term loans and increased deposits with non-resident banks.

Reserve assets also rose, driven by rand depreciation and a higher gold price.

Foreign liabilities fell by 1.7 percent, largely due to lower portfolio investment liabilities.

This was influenced by a 1.5 percent drop in the FTSE/JSE All-share Index and rising domestic bond yields.

Direct and other investment liabilities, however, increased from higher equity valuations, loan financing, and non-resident short-term loans and deposits.