South Africa’s rand is posting its strongest weekly rally in more than two decades, supported by rising precious metal prices and signs that the country’s economic outlook is improving.
The currency is on track for an eighth straight weekly gain against the US dollar, which would be its longest winning streak since December 2002, according to Bloomberg data. Over this period, the rand has strengthened by about 6.1%.
Business Insider Africa reported earlier this month that the rand began 2026 at its strongest level since 2022, helped by positive domestic developments such as ongoing economic reforms and higher metals prices.
Investor sentiment has also been underpinned by a cautious central bank and government initiatives aimed at boosting growth in Africa’s largest economy, which has averaged less than 1% annually over the past decade.
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Support for the currency has been reinforced by monetary policy dynamics. Policymakers adopted a lower inflation target last year, strengthening expectations that South Africa will retain an interest rate advantage over the United States.
Bloomberg Economics notes that forthcoming inflation data could confirm that price pressures have already peaked.
With the policy rate at 6.75% and inflation projected at around 3.6%, South Africa’s real interest rate is above 3%, a level that continues to attract yield-seeking investors.
The momentum has not been limited to the currency market. South Africa’s benchmark equity index climbed more than 2% this week to reach a record high, driven largely by strong gains in mining stocks.
Confidence in the rand is also building as the Reserve Bank prepares for a significant overhaul of the country’s cash system.
The proposed changes are designed to cut costs and improve access through the creation of a cash-management utility, the rollout of new ATMs, and tighter controls on cash circulation.
If implemented, the reforms would represent the most substantial change to South Africa’s cash circulation framework since ATMs were first introduced more than 40 years ago.
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Image Credit: Corporate Finance Institute
