The risk-sensitive rand has started the week sharply weaker as investors, unnerved by surging oil prices and the potential effect on global inflation and growth, dumped risk assets and took profit on some of their best-performing trades.
The rand weakened to below R16.90/US$, reaching levels not seen since mid-December.
Crude oil prices surged more than 25% as the expanding US-Israeli war with Iran led some major Middle Eastern oil producers to cut supplies amid fears of prolonged disruption to shipping through the Strait of Hormuz.
Analysts said the rand is likely to remain weak as a rise in global risk aversion and higher oil prices weigh on South Africa, a net importer of energy.
“The stars have aligned for the rand to come underconsiderable pressure, and the only response the South African Reserve Bank might have to combat the outflow from bonds and the volatility that might well be reflected in the rand is through rate hikes,” said ETM Analytics in a note.
Reserve Bank governor Lesetja Kganyago told Reuters last week that it will revise its risk scenarios for its next policy meeting as the Middle East conflict continues to push oil prices higher.
The bank is due to announce its interest‑rate decision on 26 March, after leaving its main lending rate unchanged at 6.75% in a split vote in January, saying at the time that policymakers wanted to see inflation expectations ease further.
JSE falls
On the JSE, the Top-40 index was down 0.6% in early trade. Domestically focused investors this week will look to Statistics SA’s release of fourth quarter GDP data and January mining and manufacturing figures for clues on the health of the economy.
Read: World hit by worst oil shock since the 1970s
“Until there is clarity on the duration and scale of the conflict, markets are likely to remain volatile with investors favouring defensive positioning,” said Andre Cilliers, currency strategist at TreasuryOne. — Sfundo Parakozov, (c) 2026 Reuters
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