The AED to ZAR exchange rate is currently in a bearish trend.
Key drivers include:
- The interest rate differential has widened, with the South African Reserve Bank lowering the repo rate while the UAE maintains higher rates.
- The UAE's strong economic growth outlook, projected at 4.9% in 2025, contrasts with South Africa's slower growth forecasts of 1.4% in 2026.
- Volatile oil prices, trading near recent highs, could impact the ZAR, given the South African economy's reliance on commodities.
In the near term, the AED to ZAR pair is expected to trade within a stable range, continuing recent patterns.
An upside risk could emerge if the UAE's Digital Dirham enhances economic stability and boosts investor confidence. Conversely, a downside risk lies in further monetary easing by the South African Reserve Bank, which could weaken the ZAR further.