South African Reserve Bank Governor Lesetja Kganyago said the rand has held up well despite the shock caused by the Iran war, reflecting more confidence in the country’s economic outlook.
“Rand resilience has cushioned, but not shielded us from the shock,” he told Bloomberg TV on the sidelines of the International Monetary Fund and World Bank meetings in Bangkok on Friday.
“The important thing is that the currency had been less volatile than it had been in the past, and it is a combination of push factors and a combination of pull factors.”
Kganyago attributed the rand’s performance to factors including lowering the inflation target last year to 3% and government efforts to pursue fiscal consolidation, which contributed to a decline in the risk premium that investors demand to purchase the country’s bonds.
Higher prices for South Africa’s exports of key commodities including gold and platinum have also helped to
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