Falling foreign exchange reserves and US-Iran negotiations put pressure on the rand, with inflation risks becoming the focus.
- The South African rand weakened on Friday, trading at 16.40 to the US dollar in intraday trading, down about 0.5% from the previous day's close, as the domestic market digested last month’s decline in foreign exchange reserves. Meanwhile, peace talks between the US and Iran kept market sentiment cautious, and concerns about inflation remained in focus.
- Data from the South African Reserve Bank shows that by the end of May, international liquidity reserves had fallen to $73.47 billion from $73.76 billion in April. As a net fuel importer, South Africa is highly exposed to the risks posed by rising global energy prices.
- Next week, investors will focus on Tuesday’s GDP data release to gauge the health of Africa's largest economy. Current account, mining, and manufacturing data will be announced on Thursday. The Johannesburg Stock Exchange Top-40 Index fell 0.6%, and the yield on the benchmark 2035 government bond rose 13 basis points to 8.68%.
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