{"id":862651,"date":"2026-06-05T10:40:00","date_gmt":"2026-06-05T08:40:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=862651"},"modified":"2026-06-05T10:57:59","modified_gmt":"2026-06-05T08:57:59","slug":"rand-goes-from-zero-to-hero-3","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/862651\/rand-goes-from-zero-to-hero-3\/","title":{"rendered":"Rand goes from zero to hero"},"content":{"rendered":"\n

South Africa\u2019s rand is back near the top of the carry-trade table after languishing close to the bottom in the weeks following the outbreak of the Iran war.<\/p>\n\n\n\n

The rand has returned about 5% since the beginning of April for traders who borrow dollars to invest in higher-yielding emerging-market assets. <\/p>\n\n\n\n

That\u2019s the most after Hungary\u2019s forint out of 22 peers tracked by Bloomberg.<\/p>\n\n\n\n

Traders took a 4.7% hit in the rand-dollar carry trade in March, according to data compiled by Bloomberg.<\/p>\n\n\n\n

But now they\u2019re flocking back to the nation\u2019s high-yielding bonds after price swings eased to below pre-war levels. <\/p>\n\n\n\n

They\u2019re also attracted by South Africa\u2019s economic-reform story, according to Robert-Lee Griffith, a co-founder of risk management and global payments firm Currency Solutions.<\/p>\n\n\n\n

\u201cThe rand topping the EM carry table is no surprise when you look at the fundamentals,\u201d Griffith said.<\/p>\n\n\n\n

\u201cSouth Africa offers some of the highest real yields in the emerging world, and with the dollar soft and FX volatility subdued, carry conditions are close to ideal.\u201d<\/p>\n\n\n\n

The South African Reserve Bank raised borrowing costs by 25 basis points to 7% last week, its first increase in three years, as it sought to stifle inflation from elevated oil prices. <\/p>\n\n\n\n

The central bank also signalled that more hikes may be needed to bring inflation back to the 3% target if the conflict persists.<\/p>\n\n\n\n

Implied volatility in the rand-dollar pair dropped to around 11% this week after spiking as high as 15.9% in March. <\/p>\n\n\n\n

That\u2019s reducing the risk of holding rand assets to benefit from bond yields that are among the highest in emerging markets.<\/p>\n\n\n\n

Non-residents bought a net R37.29 billion of government debt since the beginning of April, following a record R56.19 billion selloff in March, based on settled trades data reported by stock exchange operator JSE Ltd.\u00a0<\/p>\n\n\n\n

The benchmark 10-year yield has dropped 67 basis points to around 8.65% in that period, with only Turkey, Brazil, Colombia and Mexico offering higher yields among major emerging markets. <\/p>\n\n\n\n

The inflows are a sign of confidence in the rand and the South African economy\u2019s resilience to the energy shock sparked by the Middle East conflict.<\/p>\n\n\n\n

\u201cInvestors are making a structural call on South Africa, not simply chasing a yield pick-up,\u201d Griffith said.<\/p>\n\n\n\n

\u201cWhen institutional money returns to the bond market after a period of selling, it tends to be stickier than currency flows alone.\u201d<\/p>\n\n\n\n

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

By\u00a0Mpho Hlakudi for Bloomberg<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa\u2019s rand is back near the top of the carry-trade table after languishing close to the bottom in the weeks following the outbreak of the Iran war.<\/p>\n","protected":false},"author":59,"featured_media":817333,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[1850,3670],"class_list":["post-862651","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-bloomberg","tag-rand"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862651","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\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=862651"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862651\/revisions"}],"predecessor-version":[{"id":862656,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862651\/revisions\/862656"}],"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=862651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=862651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=862651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}