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Standard Bank Group
South Africa FX 06 October 2025

FX Monthly Chart Book

Shireen Darmalingam

  • The rand benefitted in September from a weaker USD in response to softer US data and growing expectations that the Fed would ease policy. The rand was also supported by further gains in SA’s terms of trade, which increased by 2.0% during September and 8.2% in the year to date. The rand ended September stronger, at R17.26/$, from R17.65/$ in August. This was a 2.3% gain. It was also stronger against both the euro and the pound, gaining 1.7% and 2.6% respectively. It traded in a wide range of R17.13/$ – R17.81/$ in September.
  • With the USD under pressure, emerging-market currencies, including the rand, gained ground in September: the COP, HUF, ZAR, BRL, and MXN were amongst the best-performing EM currencies, and the ARS, PHP, RUB, IDR, and TRY the worst-performing.
  • Rand strength was in September supported by a combination of global and domestic factors. Traction in domestic activity bolstered confidence in the rand. The rand’s gains were also supported by a lack of substantive negative surprises domestically (such as policy shocks and/or sudden deterioration in fundamentals). Following the SARB’s July 2025 announcement regarding the bank’s preference for anchoring inflation closer to the bottom of its 3-6% target range, around 3%, the rand strengthened against the dollar. This came on the back of increased investor optimism about the central bank’s alignment with global peers that maintain lower inflation goals.
  • The SARB’s monetary policy committee kept the repo rate unchanged at 7% at the September monetary policy meeting, citing a cautious approach amid inflation risks and heightened global uncertainty. The SARB’s decision, however, was consistent with market expectations and helped maintain investor confidence, which assisted rand strength in September. 
  • We see scope for modest further gains this year, but the weaker trend earlier this year weakens the average. We see the rand averaging R17.90/$, R20.30/€ and R23.70/£ in 2025.
 

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