As the International Monetary Fund (IMF) releases its April 2026 World Economic Outlook, pointing to a fragile and uneven global recovery, fintech company Verto warns that South African SMEs trading internationally are facing a growing and often underestimated threat: foreign exchange (FX) volatility.
While the IMF highlights moderating inflation and gradual global stabilisation, it also points to persistent uncertainty, policy divergence, and ongoing pressure across emerging markets. For South African businesses, these conditions are translating into more volatile and unpredictable currency movements – particularly for the rand.
For SMEs operating on thin margins, even small shifts in exchange rates can have a disproportionate financial impact.
“A 2% to 3% movement in the rand might not sound significant, but for an SME it can wipe out the entire margin on a single transaction,” says James Booth, head of revenue at Verto.
Unlike large corporates with dedicated treasury teams and formal hedging strategies, many SMEs remain structurally exposed to currency fluctuations. This is especially true for businesses importing goods, paying international suppliers, or expanding into new markets where multiple currencies are involved.
The IMF also highlights increasing fragmentation in the global economy, driven by geopolitical tensions, shifting trade dynamics, and uneven regional recovery. This fragmentation is contributing to more volatile currency markets, adding another layer of complexity for businesses engaged in cross-border trade.
“As global conditions remain uncertain, the rand will continue to react sharply to both international developments and local pressures,” adds Booth. “Many SMEs still treat FX as a cost to absorb rather than a risk to manage – and, in today’s environment, that mindset is becoming increasingly expensive.”
Beyond immediate cost pressures, unmanaged FX exposure can disrupt pricing strategies, strain cash flow, and erode competitiveness in global markets. Businesses that lack visibility or control over currency risk may find themselves at a growing disadvantage.
Verto says closing this gap will require a shift in how SMEs access and manage FX, including improved pricing transparency, real-time visibility, and access to tools traditionally reserved for larger enterprises.
“South African SMEs are increasingly operating on a global stage,” says Booth. “But without the ability to actively manage currency risk, that opportunity can quickly become a financial vulnerability.”