South African Rand Steadies, Inflation Rate Rises to 4%
The South African rand (ZARUSD) opens trading on a weak note after the local unit was sold off amid rising crude oil prices, a direct consequence of Middle East tensions.
In its morning brief on Wednesday, First National Bank (FNB) told investors the rand lost some ground against the greenback on Tuesday but is stable this morning.
The stability of the local currency unit comes as traders continue to monitor the ongoing conflict in the Middle East amid intensifying global inflationary pressures.
This morning, the rand is trading at R16.70 to the US dollar, R19.37 to the euro and R22.36 to the British pound, FNB told investors in a note.
Gold prices traded lower in yesterday’s session as investors focused on the inflation risks amid escalating tensions between the United States (US) and Iran, coupled with increasing bets that the Federal Reserve may adopt a hawkish stance this year to contain inflation.
Gold is trading at $ 4,463/ounce, according to data from the global commodity market. Brent crude oil maintained its upward momentum on Tuesday following reports that the US threatened to resume its military strikes on Iran if they failed to accept the US peace terms. This morning, Brent crude oil is stable at $110.47/barrel.
South Africa’s annual inflation rate quickened to 4% in April 2026 from 3.1% the prior month, slightly above the expected 3.9%.
This marked the steepest reading since August 2024, moving further away from the South African Reserve Bank’s 3% inflation target.
Pressure came from housing and utilities, which settled at 5.2% vs 5.1% in March, driven by a recent increase in electricity tariffs, and transportation, as petrol prices were raised in early April, with a lagged pass-through from higher global oil prices linked to the Iran war also contributing.
The core inflation rate, which excludes food, non-alcoholic beverages, fuel, and energy, rose to 3.6%, the highest since December 2024, up from 3.2% the month before.
On a monthly basis, the CPI rose by 1.1% in April, the most since July 2022, after a 0.6% increase in the prior month. UK Headline Inflation Declines to 2.8% in April
