South African Rand Stays Resilient Amid Geopolitical Uncertainty

South African Reserve Bank Governor Lesetja Kganyago said the rand has remained relatively resilient despite economic shocks associated with the Iran war, reflecting improved confidence in South Africa’s economic outlook. Speaking during the IMF-World Bank meetings in Bangkok, he attributed the currency’s performance to a lower inflation target, fiscal consolidation, and stronger export earnings from commodities such as gold and platinum. South Africa lowered its inflation target to 3% last year, helping reduce the risk premium investors demand to hold its government bonds. Higher commodity prices have also helped offset rising fuel costs, keeping terms of trade favorable. However, Kganyago warned that the rand could weaken if commodity prices slump or monetary and fiscal discipline slips.