South Africa’s rand slumped in early trading on Friday, as renewed conflict in the Middle East triggered a wave of risk aversion across global markets, pushing investors toward traditional safe havens.
The local currency weakened to 18.04 against the U.S. dollar by 0657 GMT, falling 1.6% from Thursday’s close. This marked a sharp reversal from its recent gains, which had been supported by easing domestic political tensions, speculation around a revised inflation target, and a rally in precious metal prices.
But hopes of continued momentum were overshadowed by overnight Israeli military strikes on Iran — a development that rattled global markets and intensified fears of broader regional instability. The Middle East’s status as a key oil producer has left investors wary of supply disruptions and potential ripple effects on energy prices.
The heightened geopolitical tension adds to existing global economic headwinds, including the unpredictability of U.S. trade policy, leaving emerging market assets under renewed pressure.
No major domestic economic indicators are expected on Friday, though attention will soon shift to next week’s releases of South Africa’s consumer inflation and retail sales data, both of which could offer further insight into the country’s economic trajectory.
In bond markets, the yield on South Africa’s benchmark 2035 government bond rose 16.5 basis points to 10.25%, reflecting investor unease and reduced appetite for risk.