In a forceful speech in New York in the US, Deputy Minister of Finance David Masondo denied that South Africa favours Russia and warned that the US allegations against South Africa need to be resolved quickly to settle the rand and government bond prices.

"Let me state our position clearly. South Africa supports a rules-based international order, underpinned by the UN Charter and the sovereignty of all nations. We have consistently taken a non-aligned stance on the conflict in Ukraine. We do not accept that our non-aligned position favours Russia above other countries," he said.

In his speech at the launch of Rand Merchant Bank’s new office in New York on Thursday, Masondo said the international community needs to work together to urgently to prevent further loss of life and displacement of Ukrainian civilians in Ukraine. Instead of government’s usual reference to the invasion as a "Russia-Ukraine conflict", Masondo spoke about the "war in Ukraine".

Masondo’s remarks came as the rand continues to trade near record lows, following a crash triggered by US allegations that Russia was supplied with arms in South Africa. After hitting an all-time low of R19.50/$ last week, the rand traded at R19.485 earlier on Thursday.

"We have seen the negative impact that this allegation has had on our currency and bond market. Therefore, it is crucial that we urgently close the matter to ensure certainty in the market."

The deputy minister reiterated that the South African government has made it clear that no sale of arms to Russia was authorised by the National Conventional Arms Control Committee.

"Indeed, since 1994, South Africa has put in place a strict arms-control regime that ensures full transparency and oversight. Since we do not have concrete evidence to support these allegations, the independent inquiry headed by a retired judge is meant to establish the facts.”

Masondo said that despite the allegations, South Africa’s bilateral cooperation with the US continues uninterrupted.

The US is a key partner for South Africa on issues of trade, peace, security and development agenda. We have a strong and longstanding relationship that we can rely on.

Masondo stressed that the US remains the largest single source of foreign direct investment into SA, and is the country’s third-largest trading partner.

He said that South Africa will host the 2023 African Growth and Opportunity Act (AGOA) Forum and will use this opportunity to push for an extension of AGOA beyond 2025.

This comes amid fears that the US may cancel South Africa’s AGOA benefits (duty-free exports of some products to the US) as a sanction following the arms allegations.

Masondo also said that government is confident that it will be removed from the "grey list" by 2025, and that it will have a limited impact on financial stability and the cost of doing business with South Africa.

RMB says its first New York office will help to facilitate greater US business flows into the African continent. The office will focus on US-headquartered multinational corporations with African subsidiaries, nongovernmental corporations, as well as US corporates with no African presence that want to expand to the continent.