{"id":857774,"date":"2026-04-20T16:28:33","date_gmt":"2026-04-20T14:28:33","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=857774"},"modified":"2026-04-20T16:36:28","modified_gmt":"2026-04-20T14:36:28","slug":"rand-goes-from-hero-to-zero","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/857774\/rand-goes-from-hero-to-zero\/","title":{"rendered":"Rand goes from hero to zero"},"content":{"rendered":"\n

The South African rand has weakened significantly since the onset of the war in the Middle East and is now ranked among the worst-performing emerging-market currencies.<\/p>\n\n\n\n

According to Investec Chief Economist, Annabel Bishop, the rand is 3.5% weaker against the US dollar than before the war in the Middle East, while the US dollar is up 0.7% in comparison. <\/p>\n\n\n\n

The rand was trading at R16.34 to the dollar, R22.10 to the pound and R19.23 to the Euro by 16h20.<\/p>\n\n\n\n

Overall, the trade-weighted rand is 2.6% weaker, as the domestic currency has been negatively impacted, she said.<\/p>\n\n\n\n

“Foreigners have sold R34.1 billion worth of South African bonds, weakening the rand to the third-worst performing emerging market currency in the Bloomberg ranking to date since before the Middle East war started,” she said in a Monday (20 April) note.<\/p>\n\n\n\n

The rand is typically sold in risk-off periods.<\/p>\n\n\n\n

Bishop said that, while the rand has pulled back from its weak point at the end of March, when it was 5.9% weaker than the US dollar, negative sentiment toward South Africa persists.<\/p>\n\n\n\n

This is because South Africa is once again being grouped with riskier emerging market currencies\u2014a stark shift from the positive-sentiment grouping it had before the war.<\/p>\n\n\n\n

In the index, the rand is now ranked at the bottom of 21 currencies, alongside the Philippine Peso, Thai Baht, South Korean Won, Hungarian Forint, and Mexican Peso.<\/p>\n\n\n\n

“These currencies are also the worst-performing in the carry trade, with global financial markets experiencing a negative carry trade return for these exchange rates, influenced also by rand depreciation itself on the return,” Bishop said.<\/p>\n\n\n\n

Among the currencies, the rand has experienced the greatest volatility, ranking among the most volatile emerging-market currencies. Its implied volatility is up significantly, the economist noted.<\/p>\n\n\n\n

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

Warning signals ahead<\/h2>\n\n\n\n

Bishop flagged several risks lying ahead, even as the Middle East war continues to unwind slowly and unevenly.<\/p>\n\n\n\n

The Brent crude oil is now priced around $95 a barrel, but futures are priced at only $82 a barrel by November.<\/p>\n\n\n\n

This reflects a slow decline in spot prices, which is also evident in petrol and diesel futures, showing the same slow progress.<\/p>\n\n\n\n

Analyses from Schroders and Bloomberg project similar outcomes, with optimistic scenarios pointing to $75 a barrel by the end of the year and downside scenarios exceeding $100 a barrel.<\/p>\n\n\n\n

In both cases, prices are a far cry from the sub-$60-a-barrel levels seen before the war.<\/p>\n\n\n\n

Also reflecting warnings from other analyses, Bishop noted that local fuel price recoveries are pointing to another massive increase in petrol and diesel prices for May.<\/p>\n\n\n\n

While this is expected to be lower by month-end, it is unlikely to swing into positive territory (ie, a cut), while the question of the R3.00 per litre cut to fuel taxes being added back in remains uncertain.<\/p>\n\n\n\n

Regardless, Bishop said the inflationary impact of the war so far is likely to only show up in April\u2019s CPI figures, released in May.<\/p>\n\n\n\n

This week’s publication of March\u2019s CPI inflation figure is widely expected to be close to February\u2019s 3.0% y\/y, causing little rand impact.<\/p>\n\n\n\n

Looking ahead, inflation is expected to rise, averaging 4% y\/y for the second quarter.<\/p>\n\n\n\n

“The war in Iran is only seen by financial markets currently to allow traffic in the Strait of Hormuz to return to normal by the end of June,” she said.<\/p>\n\n\n\n

Bishop said the risk is to the upside for inflation from a longer war in the Middle East, which was expected to have ended by now.<\/p>\n\n\n\n

“The risk, therefore, is for higher-than-expected inflation for South Africa, negatively affecting the rand,” she said.<\/p>\n\n\n\n

This will ripple into decisions on interest rates, which are now expected to be hiked by 25 basis points at the Monetary Policy Committee’s May meeting.<\/p>\n","protected":false},"excerpt":{"rendered":"

After being flooded with positive sentiment at the start of the year, the rand is back in the basket of worst-performing currencies thanks to the war in the Middle East.<\/p>\n","protected":false},"author":10,"featured_media":817333,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[19853,1122,1891,3670,10022],"class_list":["post-857774","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-annabel-bishop","tag-iran","tag-middle-east","tag-rand","tag-united-states"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/857774","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=857774"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/857774\/revisions"}],"predecessor-version":[{"id":857787,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/857774\/revisions\/857787"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/817333"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=857774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=857774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=857774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}