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Corporate and Investment Bank
Standard Bank Group
South Africa FX 09 March 2026

FX Monthly Chart Book

Shireen Darmalingam

  • The rand was modestly stronger in February 2026 on balance, appreciating against the dollar, euro and pound despite bouts of volatility linked to global risk sentiment. Over the month, the rand was 1.3% stronger than the dollar, 1.7% stronger against the euro and 2.9% stronger than the pound. The rand was supported by improving domestic policy credibility, contained inflation and attractive carry relative to peers. It traded in a range of R15.80/$ - R16.43/$. Performance across emerging market currencies was mixed: the ARS, BRL, PHP, CNY and MXN ranked among the strongest performers against the dollar, with the COP, RUB, TRY, PLN and RON amongst the weakest performers.
  • Domestic factors were a key source of support for the rand during February. Investor confidence strengthened following the February budget, which reaffirmed South Africa's fiscal consolidation trajectory through a narrowing deficit and a sustained primary surplus, reinforcing perceptions of improved macroeconomic discipline. Inflation also remained well contained, with headline CPI close to the SARB's 3% target, providing additional support to the currency amid a steady and credible monetary policy stance.
  • Global conditions were broadly supportive for much of the month. The US dollar traded largely sideways as expectations of eventual Federal Reserve rate cuts firmed, easing pressure on emerging market currencies. At the same time, relatively stable commodity prices, particularly gold, lent support to the rand, reflecting South Africa's export exposure and the currency's sensitivity to precious metal price dynamics. However, the rand came under pressure toward the end of February as escalating geopolitical tensions in the Middle East triggered global risk aversion. Safe-haven demand for the dollar resurfaced, while surging oil prices posed a negative terms-of-trade shock for South Africa as a net oil importer. These developments pushed the rand back above the R16.00/$ level in early March, underscoring the rand's continued vulnerability to external shocks despite an improved domestic fundamentals backdrop.
  • National Treasury (NT) noted that SA's stronger public finances provide a sizeable buffer against external shocks, including potential spillovers from the conflict involving Iran. Treasury highlighted that, for SA to be knocked off its fiscal consolidation path, revenue would need to decline by around R60bn, or government spending would have to increase by a similar amount. Treasury Director-General Duncan Pieterse said that the war in Iran could affect SA's economic outlook if it were to have a sustained impact on global growth or oil prices. He added any headwinds from higher crude oil prices could be partly offset by stronger prices for coal and other commodities. At this stage, with the economic impact of the war primarily on oil prices, we expect the impact on SA growth to be modest (around 0.1-0.2ppt) depending on how the war unfolds.
  • We're only marginally weakening our rand exchange rate forecasts, for now; it is noteworthy that the rand is only modestly weaker than our narrow band of fair-value estimates. We see the rand averaging R16.48/$, R19.71/€ and R22.55/£ in 2026. The rand is expected to end this year at R16.60/$, and R16.85/$ in 2027. 
 

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