Rand Steadies Against Crosses, SARB Hikes Oil Price Forecast
Rand is trading steady against the US dollar, Euro and British pound on Monday as markets continue to digest the South African Reserve Bank (SARB)’s 25-basis-point interest rate hike last week.
The rand is stable at R16.22 to the dollar, R18.89 to the euro and R21.81 to the British pound, First National Bank (FNB) said in its morning brief.
The local unit strengthened against its major crosses on Friday and posted a monthly gain, supported by fresh local data showing the April trade surplus widened.
The SARB raised its oil price forecast by around $10 per barrel over the forecast horizon, adding to the over $10 upward adjustment to the 2026 forecast at the previous meeting.
Higher oil prices are the main driver of the South African central bank’s more bullish inflation outlook.
Consistent with the Bank’s research, FNB said the scale of this revision points to a stronger pickup in fuel inflation and some second-round effects feeding through into food and core inflation (headline inflation excluding energy and food).
Encouragingly, the rand has remained resilient, reflecting the gains from structural reforms and improved demand for South African assets.
However, with the war ongoing and the Strait of Hormuz effectively closed, inflation risks are becoming more visible and could place further pressure on the currency, particularly if supply disruptions and rising costs weigh on activity and heighten socio-political risks.
The bullion traded higher on Friday following reports that the United States (US) and Iran reached a preliminary deal to extend their ceasefire, ultimately easing expectations of higher-for-longer interest rates.
This yellow metal is paring gains and trading lower on Monday amid uncertainty around a deal between the US and Iran. Gold is currently quoted at $4 515/ounce. Oil prices traded rangebound on Friday but posted a monthly loss amid renewed optimism of a US-Iran peace deal.
The commodity continues to be impacted by uncertainty, which has clouded prospects of a ceasefire. Brent crude is currently trading at $93.10/barrel. Money Market Liquidity Tops N6trn Ahead of OMO Inflow
