South African rand nears six-month high below 16 per US$
The South African rand strengthens below 16 per US dollar and trades near its strongest level since late February, as a softer US dollar and higher precious metals support EM appetite.
The South African rand strengthened below 16 per US dollar, trading near its strongest level since the Iran war began in late February.
A softer US dollar, elevated precious-metal prices and stronger appetite for emerging-market assets supported the currency, while lower oil prices and fading concerns over expanded US sanctions on Iran also helped.
The rand also continues to benefit from the SARB’s relatively restrictive monetary stance and improving fiscal outlook.
The central bank held its policy rate at 7% in July, while inflation eased to 4.3% in July from 5% in June, mainly due to lower food and fuel prices.
However, inflation remains above the SARB’s 3% target and 4% upper tolerance limit.
Attention is now turning to October’s mid-term budget, which is expected to signal an improvement in fiscal metrics.