The South African rand firmed to 16.70 per US dollar, rebounding from last week’s more than three-month low of 16.98. The recovery followed easing tensions between the US and Iran, which drove a sharp decline in oil prices and improved global risk sentiment. Brent crude retreated from two-month highs after Washington and Tehran halted hostilities following two weeks of strikes, bolstering hopes for a diplomatic solution that could de-escalate the conflict and restore shipping through the Strait of Hormuz.
The rand had weakened by 2% against the dollar last week after the South African Reserve Bank unexpectedly left its benchmark interest rate unchanged, defying market expectations for a 25-basis-point increase. At the same time, South Africa’s annual inflation rate accelerated to 5.0% in June, the highest in two years, while core inflation rose to 4.1%, its strongest level since September 2024. Both readings remain above the upper bound of the SARB’s 3% ± 1 percentage point target range.
