The South African rand inched up to around 16.6 per USD, its highest level in a week, as traders weighed the interest rate outlook in light of the latest inflation figures. Headline inflation slowed for a second consecutive month, easing to 3% in February — in line with the central bank’s new target and slightly below market expectations of 3.1%.
Despite the softer data, the South African Reserve Bank is expected to maintain a cautious, wait-and-see stance, amid persistent inflation risks linked to the US–Israel–Iran conflict. Elevated and volatile global oil prices have emerged as a key threat to the 2026 inflation outlook, primarily because higher fuel costs could spill over into broader price increases across the economy.
Most economists therefore foresee the benchmark interest rate being kept unchanged at the March 26 policy meeting. The rand has also experienced heightened volatility in recent sessions, reflecting global risk aversion and sharp swings in oil prices.
