South Africa’s rand is enjoying its strongest weekly rally in more than two decades, buoyed by surging precious metal prices and signs of an improving economic outlook.
The currency is on course for an eighth consecutive weekly gain against the US dollar, its longest winning streak since December 2002, according to Bloomberg data. Over that period, the rand has appreciated by 6.1%.
Business Insider Africa reported earlier this month that the South African rand opened 2026 at its strongest level since 2022, supported by positive domestic trends, including ongoing economic reforms and higher metals prices.
Investor confidence has also been boosted by a cautious central bank and government efforts to lift growth in Africa’s largest economy, which has averaged less than 1% over the past decade.
Inflation and real interest rates
Policymakers adopted a lower inflation target last year, reinforcing expectations that South Africa will maintain its interest rate advantage over the United States.
Bloomberg Economics notes that upcoming inflation data could confirm that price pressures have peaked. With the policy rate at 6.75% and projected inflation around 3.6%, South Africa’s real interest rate stands above 3%, making the rand attractive to yield-seeking investors.
The rally has extended beyond the currency market. South Africa’s benchmark equity index rose more than 2% this week to a record high, driven by strong gains in mining stocks.
Confidence in the rand is growing alongside preparations by the Reserve Bank for a major overhaul of the country’s cash system.
The plan aims to lower costs and improve access through a cash-management utility, new ATMs, and stricter circulation controls. If implemented, these reforms would mark the biggest change to cash circulation since ATMs were introduced more than 40 years ago.