South Africa’s rand strengthened against the U.S. dollar on Monday, edging closer to the 16-per-dollar level as soaring gold prices lifted the country’s commodity-linked currency.
The move comes just days before the South African Reserve Bank’s (SARB) first interest rate meeting of 2026, Business Insider Africa reported.
At 07:03 GMT, the rand was trading at 16.0475 to the dollar, about 0.4% firmer than its previous close and close to its strongest level since June 2022.
The U.S. dollar softened slightly against a basket of major currencies, while gold surged past $5,000 per ounce, extending a historic rally fueled by investors seeking safe-haven assets amid ongoing geopolitical uncertainty.
The rand, which often tracks global risk appetite and shifts in U.S. monetary policy, has gained roughly 3% against the dollar since the start of the year.
Analysts say South Africa’s exposure to gold, platinum, and other commodities that typically move opposite to the U.S. currency could push the rand through the 16.00-per-dollar level in the coming days.
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“(This will) give the SARB something to think about as they deliberate whether there is enough room to cut rates so early in the year, despite the inflation rate remaining well above the 3% target,” ETM Analytics said in a note, pointing to the difficult balance facing policymakers.
The SARB cut its main lending rate by 25 basis points in November, citing room to ease policy as the inflation outlook improved.
Markets are now focused on Thursday’s meeting for clues on whether additional rate cuts are on the table.
South Africa’s benchmark 2035 government bond also strengthened in early trading, with yields falling 7.5 basis points to 8.07%.
Analysts note that gains in the rand driven by higher commodity prices could give the central bank more flexibility, even though inflation remains above its target.
Investors are expected to keep a close eye on both the SARB’s guidance and the direction of gold prices, as both are likely to influence the rand’s performance and broader financial conditions in South Africa.
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Image Credit: Investopedia
