Everybody loves rand

BULLISH: LOCAL RISK FACTORS SEEM TO HAVE LARGELY DISAPPEARED

- Adriaan Kruger

UPSIDE. Economists generally expect that the rand will continue to appreciate.

(Picture: Bloomberg)

The rand has strengthened from more than R19 to the US dollar in April 2025 to better than R16 per dollar this week as the American currency continues to weaken and precious metal prices soar.

The gold price added a cool $500 (about R8 016) to nearly $5 100 per ounce in a matter of days and platinum breached $2 770 per ounce, the highest in decades.

What is interesting about the strengthening of the rand is that all the usual risks associated with the exchange rate seem to have disappeared.

Suddenly, nobody is talking about lacklustre economic growth, trade sanctions, the strong possibility that SA would be excluded from the US African Growth and Opportunity Act (Agoa), high unemployment, failing municipalities and ongoing corruption.

The consensus view among economists seems to be that the rand will continue to appreciate.

Johann Els, group chief economist at PSG Financial Services, says the factors that started the strong trend in the rand since the middle of last year will probably drive the rand stronger.

"Rand strength since the second half of last year and thus far into 2026 is as a result of a combination of factors, of which a weaker US dollar is significant.

"The weaker dollar we have seen is as a result of US policy uncertainties created by the new US administration," says Els.