The South African rand weakened to around 16.6 per USD, its lowest level in more than two weeks, as stalled US-Iran peace efforts and ongoing disruptions in the Strait of Hormuz increased demand for the safe-haven dollar. While the US has extended its ceasefire with Iran indefinitely pending a final agreement, Tehran has so far shown no willingness to return to negotiations amid the continuing port blockade. Oil price volatility persisted, reflecting concerns over prolonged supply disruptions and heightened inflation risks.
On the monetary policy front, major central banks are largely in wait-and-see mode. South African Reserve Bank Governor Lesetja Kganyago recently indicated that the Bank stands ready to respond to any sustained inflationary pressures arising from the Middle East conflict, reaffirming its firm commitment to the 3% inflation target. South Africa’s annual inflation rate inched up to 3.1% in March from 3.0% in February and is expected to rise further in the coming months as global cost pressures increasingly pass through to consumer prices.
