South African Rand Slightly Firmer

The South African rand edged up to around 16.3 per USD, benefiting from falling oil prices, a softer US dollar and rising prices of precious metals, particularly gold. Oil prices decreased amid reports of a possible phased agreement between US and Iranian negotiators to reopen the Strait of Hormuz, though uncertainty remains elevated. Meanwhile, the South African Reserve Bank in an expected move raised its key repo rate to 7.25%, following similar decisions by the Federal Reserve and the ECB. Policymakers cited renewed upside risks following the escalation of the Iran war, which pushed up oil prices and dampened the global economic outlook. Governor Lesetja Kganyago stressed the need to bring inflation back to the SARB’s 3% target, reaffirming its commitment to price stability. Headline inflation ticked up to 4.4% in August from 4.3% in July, but rising fuel prices could push it higher again in September and October.