The South African rand traded around 16.3 per USD, hovering near its strongest level since mid-April, after the South African Reserve Bank delivered a 25-basis-point interest rate increase—its first hike since 2023—to counter rising price pressures linked to tensions in the Middle East. The decision was split, with policymakers highlighting upside risks to inflation and downside risks to growth. The inflation outlook deteriorated for both this year and next, while growth forecasts were revised lower for the same periods. The central bank again outlined three alternative scenarios for the policy path, indicating that further monetary tightening may be required if the conflict involving Iran persists. Further appreciation of the rand was capped by a firm US dollar and declining prices for key precious metals, particularly PGMs and gold.