24.06.202608:47:39UTC+00South African Rand at Over 1-Month Low

The South African rand traded around 16.6 per USD, its weakest level since May 19, weighed down by a stronger dollar and declining prices for key precious metals, particularly gold and PGMs. Investors moved into the safe-haven greenback amid volatility triggered by a selloff in technology stocks and mounting expectations of further Federal Reserve rate hikes, while a US–Iran peace agreement helped ease some inflation concerns.

Domestically, South African Reserve Bank Governor Lesetja Kganyago said policymakers are starting to see early signs of second-round inflation effects and stressed the need for action. He explained that the SARB’s 25-basis-point rate increase in May, taking the policy rate to 7%, was decided without the benefit of updated inflation-expectation data. Those data are now available, he noted, and indicate expectations have drifted away from the target. Kganyago also cautioned that the US–Iran deal still leaves substantial uncertainty in place, adding that although oil flows have resumed, prices are unlikely to return to pre-conflict levels in the near term.