{"id":854464,"date":"2026-03-20T08:19:59","date_gmt":"2026-03-20T06:19:59","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=854464"},"modified":"2026-03-20T08:20:06","modified_gmt":"2026-03-20T06:20:06","slug":"rand-takes-a-big-hit","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/854464\/rand-takes-a-big-hit\/","title":{"rendered":"Rand takes a big hit"},"content":{"rendered":"\n

The South African rand breached the R17\/$ mark on Thursday as global markets reacted to escalating tensions in the Middle East and a sharp surge in oil prices.<\/p>\n\n\n\n

The rand has been one of the worst performers since the start of the Iran war, weakening rapidly from below R15.90\/$ at the end of February to around R17.07 on Thursday afternoon\u2014its weakest level since November 2025.<\/p>\n\n\n\n

It recovered slightly in early trade on Friday, pulling back to around R16.80\/$.<\/p>\n\n\n\n

The move reflects a broader shift in investor sentiment, with global markets increasingly seeking safety in the US dollar amid rising geopolitical uncertainty.<\/p>\n\n\n\n

The latest bout of volatility follows a series of attacks on key energy infrastructure in the Gulf.<\/p>\n\n\n\n

Israel struck Iran\u2019s massive South Pars gas field, which resulted in retaliatory action from Iran targeting major liquefied natural gas facilities in Qatar and infrastructure in Abu Dhabi. <\/p>\n\n\n\n

Iran has since warned that further strikes on energy sites could follow, raising fears of a prolonged disruption to global supply.<\/p>\n\n\n\n

This escalation has had an immediate impact on oil markets. Brent crude prices jumped by around 5%, pushing above $112 a barrel, as traders priced in the risk of supply constraints. <\/p>\n\n\n\n

Concerns have been amplified by the strategic importance of the Strait of Hormuz, a critical chokepoint for global oil shipments.<\/p>\n\n\n\n

The United States has urged NATO and other major beneficiaries of the route, including China, to help secure the passage, warning of severe consequences if disruptions continue.<\/p>\n\n\n\n

Investec\u2019s chief economist Annabel Bishop also noted that while the International Energy Agency has announced the release of stockpiled oil and petroleum products, markets remain unconvinced.<\/p>\n\n\n\n

The intervention is widely seen as insufficient and too slow to meaningfully ease price pressures.<\/p>\n\n\n\n

As a result, expectations are growing that supply disruptions could exceed available reserves, fuelling further increases in global oil prices.<\/p>\n\n\n\n

For South Africa, the sharp rise in oil prices, combined with a weaker rand, is driving a steep increase in fuel costs. <\/p>\n\n\n\n

Bad news for the medium term <\/h2>\n\n\n
\n
\"\"<\/a>
Investec Chief Economist, Annabel Bishop<\/em><\/figcaption><\/figure><\/div>\n\n\n

Current estimates suggest the petrol price under-recovery has climbed to R4.27 per litre for April, which could add roughly one percentage point to the country\u2019s year-on-year inflation rate for the month.<\/p>\n\n\n\n

Diesel prices are expected to rise even more dramatically, with an increase of about R7.04 per litre forecast. <\/p>\n\n\n\n

Given that diesel is a critical input for industrial activity, including manufacturing and logistics, the knock-on effects for the broader economy are substantial.<\/p>\n\n\n\n

Higher inflation is also expected to weigh on consumer spending, eroding purchasing power and dampening economic growth. <\/p>\n\n\n\n

\u201cConsumer spend is negatively affected by higher inflation, weakening economic growth,\u201d Bishop said, noting that even if the conflict proves short-lived, the economic effects will be noticeable.<\/p>\n\n\n\n

The surge in fuel costs is also likely to push up producer price inflation, with second-round effects feeding through into broader consumer prices. This will place additional strain on South Africa\u2019s already fragile growth outlook.<\/p>\n\n\n\n

Globally, the inflationary shock from higher energy prices is shifting market expectations. <\/p>\n\n\n\n

According to the S&P Global Investment Manager Index, the prospect of weaker economic growth in the short-term is accompanied by concerns over inflation due to higher energy prices.<\/p>\n\n\n\n

Investors have scaled back expectations of support from both monetary and fiscal policy, while sentiment has turned more defensive.<\/p>\n\n\n\n

Bishop added that although the base case remains for a short, sharp conflict in the Middle East, the intensification of hostilities has increased market risk. <\/p>\n\n\n\n

Additionally, hopes for US interest rate cuts have diminished, adding further pressure to global growth prospects and emerging market currencies like the rand.<\/p>\n","protected":false},"excerpt":{"rendered":"

The rand has taken a knock following escalating tensions in the Middle East and a sharp surge in oil prices.<\/p>\n","protected":false},"author":92,"featured_media":841888,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[1498,3670,853],"class_list":["post-854464","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-investec","tag-rand","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/854464","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\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=854464"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/854464\/revisions"}],"predecessor-version":[{"id":854480,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/854464\/revisions\/854480"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/841888"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=854464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=854464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=854464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}