The South African rand weakened in early trading on Thursday, pressured by a surge in global risk aversion as the Iran-Israel conflict entered its seventh day and investors braced for fresh insights from the South African Reserve Bank (SARB).
By 06:51 GMT, the rand was trading at 18.1075 per U.S. dollar, marking a 0.5% decline from Wednesday’s close and hitting its lowest level in a month. The currency’s performance mirrored that of other emerging markets, as investors sought the safety of U.S. assets amid fears of a potential escalation or direct U.S. involvement in the ongoing Middle East conflict.
Market focus will shift later today to the SARB’s June Financial Stability Review, a key report assessing risks to South Africa’s financial system and outlining measures the central bank is taking to mitigate those threats.
Although the SARB cut its main lending rate last month, it signalled caution, citing concerns over rising global uncertainties, including trade tensions under U.S. President Donald Trump and broader geopolitical instability.
South African bond markets also reflected investor unease. The yield on the benchmark 2035 government bond rose by four basis points to 10.16%, indicating weaker demand in early trade.
