The rand has strengthened to its best level since 2019, gaining 2% week-on-week against the US dollar, the Bureau of Economic Research (BER) has reported.
Including the 4.5% appreciation it recorded against the Greenback in May, the local currency has now gained 6.5% thanks to ongoing momentum in global markets.
According to the Bureau’s weekly assessment, the rand rallied despite last week’s load shedding and poor jobs figures.
In comparison, jobs figures coming out of the States are looking strong, with an increase in hiring suggesting economic resurgence despite high unemployment data recorded by America’s Bureau of Labour Statistics.
Nevertheless, the rand held firm to grow apace with peer emerging market currencies.
The BER said: “It should be noted that sentiment was more in favour of emerging markets in general. The Brazilian real also had a good start to the week.
“In addition to general market sentiment, the local currency is also benefiting from continued high prices of key export commodities. While platinum group metals took a breather in May (although prices stayed at a high level historically speaking), gold, iron ore, and in particular coal prices recorded solid gains last month.
This continues to benefit SA’s external trade account, currently at its strongest position in years (read this: https://tinyurl.com/8wr6m6f4).
The Bureau added that the stronger rand was also buffering South Africa against the oil price.
“Brent crude oil topped $70 per barrel last week after Opec (Organization of the Petroleum Exporting Countries) said it expected a tightening global oil market and that it would stick to a previously agreed rise in supply during July.
“At the same time, US crude inventories fell by more than expected in the week before last. In all, oil closed the week 2.4% higher, staying near a two-year high reached on Thursday.”
