FX.co ★ South African Rand Firms

The South African rand firmed slightly toward 16.5 per USD, supported by a weaker dollar and higher precious metal prices, especially gold and PGMs. Stronger-than-expected domestic data added to the positive tone: South Africa’s GDP grew 0.5% quarter-on-quarter in Q1 2026, up from 0.4% in Q4 and beating the consensus forecast of 0.3%. Meanwhile, reports that Iran and Israel had agreed to suspend mutual attacks pushed oil prices lower, temporarily easing concerns over inflation and interest rates. Against this backdrop, the South African Reserve Bank (SARB) raised the key repo rate by 25 basis points to 7.0% on May 28—its first increase in three years—in response to rising inflationary pressures linked to the Middle East conflict. At the same time, the central bank revised its inflation forecasts higher and downgraded its growth outlook for the current year.