The South African rand slipped toward 16.6 per USD, hovering near its weakest level since April 7, as traders moved into the US dollar amid ongoing uncertainty in the Middle East and rising oil prices. At the same time, prices of key precious metals, including gold, declined as investors weighed mounting inflation risks ahead of major central bank decisions.
Market attention is firmly on the US Federal Reserve, which is widely expected to leave interest rates unchanged, with investors looking for guidance on the future policy path. In South Africa, Reserve Bank Governor Lesetja Kganyago recently reiterated that the Bank will respond to any sustained inflationary pressures stemming from the Middle East conflict, emphasizing its strong commitment to the 3% inflation target.
While March inflation remained close to target, higher fuel and electricity prices are seen as key upside risks in the coming months. Economists are divided on the policy outlook: some expect the benchmark rate to be held at 6.75% through year-end, while others anticipate a 25 bps increase in May.
