Outlook
The rand remains supported by the January SARB rate cut to 8.0%, easing inflation and a rebound in key commodities. If global growth holds and US policy stays supportive, the ZAR could stay around current levels. However, further volatility remains possible from US rate expectations, AGOA developments, and domestic policy progress. For importers, a firmer rand can ease FX costs; exporters may face tighter USD revenue when converting back to rand.
Key drivers
- Domestic policy and inflation dynamics: SARB cut 25 basis points to 8.0% in January 2026 as inflation slowed, shaping the near-term rate path.
- Commodity prices and external demand: Strength in gold and other metals supports SA’s export outlook and tends to bolster the rand.
- Political stability and fiscal discipline: Efforts to reduce the budget deficit and improve public sector efficiency have improved investor confidence.
- Trade policy and AGOA: AGOA extension through 2028 remains under consideration in the US Congress; SA’s inclusion continues to influence forward rand expectations.
Range
ZAR/USD around 0.06235 (USD per ZAR), 2.8% above the 3-month average of 0.06065, with a wide intraday range from 0.05747 to 0.06355. ZAR/EUR around 0.05289, 2.3% above the 3-month average of 0.05168, trading in a range from 0.04991 to 0.05311. ZAR/GBP around 0.04626, 2.7% above the 3-month average of 0.04505, with a range from 0.04386 to 0.04626. ZAR/JPY around 9.6639, 2.1% above the 3-month average of 9.4632, trading in a range from 8.9991 to 9.8247. The rand has also shown strength against the USD, with a rate near 16.1 per USD implied in market price around this snapshot.
What could change it
- Policy surprises from the SARB: Unexpected shifts in the pace or direction of rate moves based on inflation data.
- Commodity price shocks: Sudden moves in gold or other SA commodity prices can drive the rand.
- AGOA developments: Delay or progression in AGOA extension and SA inclusion affect sentiment and forward pricing.
- Global risk mood and USD trajectory: Risk-off sentiment or a stronger USD can press the rand weaker.
- Domestic fiscal and governance news: Further progress or setbacks on the budget, deficits, or public-sector reforms.
