23.03.202613:50:53UTC+00South African Rand Recovers

The South African rand strengthened to around 16.9 per USD, rebounding from a recent four-month low of 17.2 per USD, as risk aversion eased following US President Trump’s announcement that planned strikes on Iranian power facilities would be postponed for five days. At the same time, the earlier slide in key precious metals, particularly gold, also moderated.

Since the outbreak of the Middle East crisis in late February, the rand has experienced heightened volatility, driven by global risk-off sentiment and swings in oil prices. The central concern is that a prolonged conflict and persistently higher oil prices could push inflation higher in energy-importing South Africa.

Market attention is now focused on the upcoming SARB policy meeting, the second of the year, where the consensus expects interest rates to be left on hold. The Iran conflict has complicated the policy backdrop, sharpening the trade-off between supporting growth and keeping inflation close to the 3% target. Prior to the recent shock, inflation expectations had shown signs of becoming more firmly anchored; they are now expected to edge higher in the near term.