South Africa’s current-account deficit narrowed to 3.1 percent of gross domestic product in the second quarter after the nation’s exports received a boost from the lagged effect of last year’s rand weakness. The gap on the current account, the broadest measure of trade in goods and services, narrowed from a revised 5.3 percent in the first three months after the nation recorded its first quarterly trade surplus in a year, the Reserve Bank said in its Quarterly Bulletin released on Tuesday in the capital, Pretoria. The median of 18 economist estimates compiled by Bloomberg was for a shortfall of 3 percent. Africa’s most-industrialized economy relies mainly on foreign investment in stocks and bonds to help fund the deficit. While a narrower gap would support the rand, it may not be sustainable and speculation that South Africa’s credit rating may be cut to junk status before the end of the year due to increased political uncertainty and sluggish growth could hinder inflows from abroad. “It doesn’t look quite sustainable,” Mike Schussler, an economist at Johannesburg-based research company Economists.co.za, said in an interview in Pretoria. “I think we are going to see a pick-up in imports and I think with the rand having strengthened in the second quarter, producers of platinum were a bit worried that they might lose out on the weak rand side, so they exported more platinum.” Higher Exports The rand lost 26 percent of its value against the dollar last year, helping the trade balance to swing to a surplus of 33 billion rand ($2.3 billion) in the second quarter from a revised deficit of 48 billion rand. Export volumes increased by 5.6 percent and the value of merchandise shipments surged 9.1 percent to 1.1 trillion rand, boosted by the lagged effect of the weaker currency and stronger external demand, the central bank said. Import volumes fell by 0.9 percent due to weak growth in domestic demand, according to the report. Proceeds from mining exports rose by 10.3 percent, mainly due to the increase in the shipment value of platinum, base metals and iron ore, the central bank said. The value of manufactured exports increased by 9.8 percent. “We do not expect the trend in the trade balance to continue at the same pace, but the current deficit would, according to expectations, be better than what it used to be last year,” Stefaans Walters, a deputy head in the Reserve Bank’s research department, said in a presentation in Pretoria. The government forecasts the current-account shortfall will narrow to 4 percent of GDP this year from 4.3 percent in 2015. Foreign direct investment rose 9.7 billion rand and investment in South African stocks and bonds recorded inflows of 33 billion rand compared with 13.5 billion rand in the first quarter. “Capital inflows over the period were supported by indications of a possible delay in the tightening of monetary policy in the U.S. and the relatively high return offered on domestic debt securities,” the Reserve Bank said. After gaining 14 percent since the start of the year, the rand has weakened almost 6 percent against the dollar since reports on Aug. 23 that Finance Minister Pravin Gordhan is being probed by police over allegations he set up an illicit investigative unit when he headed the national tax agency. The National Treasury has been at loggerheads with some state-owned companies over their governance and finances and two ruling-party politicians have suggested changes to the Reserve Bank’s jurisdiction. Toward the end of August the rand “depreciated abruptly in the wake of domestic political events,” the Reserve Bank said. Increases in bond yields in May and late-August “were mainly related to negative perceptions arising from political developments in South Africa.” The rand weakened 0.4 percent to 14.2818 per dollar at 11:30 a.m. in Johannesburg on Tuesday. Yields on rand-denominated government bonds due December 2026 fell eight basis points to 8.56 percent. Fitch Ratings Ltd. and S&P Global Ratings affirmed South Africa’s long-term foreign currency rating at BBB-, the lowest investment grade, in June and said the government must take decisive measures to boost growth, ease policy uncertainty and end political turmoil to avoid a future downgrade. The economy will probably expand at the slowest rate this year since a 2009 recession, according to the central bank. “I think that the improvement in the current-account deficit will help with the credit rating,” Kevin Lings, chief economist at Stanlib Asset Management, said by phone from Johannesburg. “It’s been one of the factors that they have flagged as a concern and I think this number will be much more manageable from a credit-rating perspective.”