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JOHANNESBURG -  A sense of optimism temporarily washed over the South African economy this afternoon after the nation recorded a trade surplus of R4.42 billion in June. 

The nation achieved a trading surplus for the second consecutive month suggesting that there is demand for South African exports.

However, both exports and imports declined in June with the 5.8% drop in imports caused by weak domestic growth. With exports dropping by 3.2% month-over-month amid slowing global growth, this is negative for South Africa, especially when factoring how exports account for approximately 30% of GDP.

The Rand’s muted reaction to the balance of trade figures suggests that the local currency is more concerned with external drivers. 

With the Federal Reserve expected to cut interest rates for the first time in over 10 years on Wednesday, the Rand like many other emerging market currencies could remain on standby until the rate decision and Jerome Powell’s post-meeting press conference.