{"id":853148,"date":"2026-03-06T13:34:51","date_gmt":"2026-03-06T11:34:51","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=853148"},"modified":"2026-03-06T13:35:25","modified_gmt":"2026-03-06T11:35:25","slug":"huge-blow-for-the-rand","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/853148\/huge-blow-for-the-rand\/","title":{"rendered":"Huge blow for the rand"},"content":{"rendered":"\n

The rand has weakened sharply against the US dollar over the past week following the bombardment of Iran by the United States and Israel, which threw markets into chaos.<\/p>\n\n\n\n

The US launched “Operation Epic Fury” on Saturday, 28 February, initiating military action in the Middle East, killing Iran’s Supreme Leader and other high-up officials.<\/p>\n\n\n\n

While the threat of war had been brewing for much of February, the attacks left global markets reeling, particularly oil.<\/p>\n\n\n\n

As a result, investors have been piling into safe-haven markets and assets, particularly weakening emerging-market currencies.<\/p>\n\n\n\n

The rand, which had been trading on a firmer footing around R15.87\u2013R15.94\/$ ahead of the conflict, weakened sharply to R16.64 on Thursday, its lowest level since the fourth week of December and down by 4.3% from last Friday. <\/p>\n\n\n\n

On Friday, 6 March, it is little changed around the R16.60\/$ level. <\/p>\n\n\n\n

The rand’s weakness has also been broad, with the local unit down by 2.6% and 3.2% against the euro and the British pound, respectively. Other emerging market units are also trading lower.<\/p>\n\n\n\n

Despite the significant blow to the rand, the currency is still showing some resilience, particularly year-on-year.<\/p>\n\n\n\n

Compared to the same time last year, the rand is still remarkably stronger, despite the Middle East conflict, having appreciated against the dollar by over 9% year-on-year.<\/p>\n\n\n\n

Moreover, the rand is still seeing small pockets of strength against the dollar amid the market turmoil, largely thanks to gains in gold and platinum\u2014key South African exports.<\/p>\n\n\n\n

ESG Analytics economist Sifiso Skenjana said these pockets have not only been driven by stronger demand for gold, but also the effective closure of the Strait of Hormuz, which has created port-related revenue opportunities for South Africa. <\/p>\n\n\n\n

“Some ships may need to be rerouted via Cape Agulhas, which could lift South Africa’s port-related revenues, one of the factors the market appears to be pricing into the currency,” said Skenjana. <\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

What happens next<\/h2>\n\n\n\n

Investec Chief Economist Annabel Bishop noted earlier this week that, while it’s clear the war has had an impact on local markets, that impact should be limited in isolation.<\/p>\n\n\n\n

However, the rand could suffer if the conditions in the Middle East persist or worsen.<\/p>\n\n\n\n

\u201cOur expected case does not see the tensions persistently spread through the Middle East, but the risk has risen,\u201d she said.<\/p>\n\n\n\n

The White House has indicated that it expects the conflict to last for four to five weeks, though it has noted it has the capacity to extend the war beyond that.<\/p>\n\n\n\n

According to Citadel Global Director, Bianca Botes, given the full-scale nature of the conflict, there are three scenarios that may play out for South Africa:<\/p>\n\n\n\n

The base case (60%) is a short\u2011term disruption risk. <\/p>\n\n\n\n

In this scenario, tensions ease, and shipping confidence gradually returns, with oil prices settling in the $70- $80\/barrel range. Gold holds above $5,000\/ounce, and the rand trends back toward R15.80\/$ to R16.00\/$, and global rate\u2011cutting cycles resume with modest delays.<\/p>\n\n\n\n

The adverse case (30%) is a multi\u2011week period of elevated disruption risk. <\/p>\n\n\n\n

In this case, oil moves toward $100\/barrel, global inflation picks up, and central banks adopt a hawkish hold. Emerging-market currencies remain under pressure, while Asian economies deploy fiscal support. Global growth is revised down by 0.5% to 1%.<\/p>\n\n\n\n

The tail risk (10%) is infrastructure escalation, where critical facilities such as Saudi Arabia\u2019s Ras Tanura refinery and Jafurah gas plant and Qatar\u2019s Ras Laffan refinery suffer lasting damage. <\/p>\n\n\n\n

In this scenario, oil moves above $120\/barrel, LNG supply is severely curtailed, and global recession risks increase. This remains a low\u2011probability but important risk, Botes said.<\/p>\n","protected":false},"excerpt":{"rendered":"

The rand has weakened sharply against the US dollar over the past week. Economists and analysts have laid out where they expect things to go from here.<\/p>\n","protected":false},"author":10,"featured_media":851084,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[19853,24118,15907,1498,3670],"class_list":["post-853148","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-annabel-bishop","tag-bianca-botes","tag-citadel-global","tag-investec","tag-rand"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853148","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=853148"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853148\/revisions"}],"predecessor-version":[{"id":853158,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853148\/revisions\/853158"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/851084"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=853148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=853148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=853148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}