The rand traded at R16.69 against the US dollar on the morning of Monday, 5 October, according to Daily Investor. Currency experts warned it could soon weaken to R17.
The local currency has lost ground for four weeks in a row, a fall of about 4.5%. Investors around the world have moved away from riskier assets, and this has hurt emerging market currencies.
TreasuryOne currency strategist Andre Cilliers said the risks for the rand still lean towards further weakness. He said a break above R16.80 to the dollar could open the way to R17.
Cilliers blamed a stronger dollar, high US bond yields and weaker demand for emerging market carry trades.
Investec chief economist Annabel Bishop said the rand had been very unstable over the past month.
“The rand saw noticeable volatility, dropping below R16.00/USD early in the month before the escalation in the Middle East war, then rising to around R16.40/USD on the US interest rate hike,” she said.
Bishop linked the US Federal Reserve rate hike to worries about energy prices and inflation. She said weak government finances around the world made markets react more strongly to higher rates than before. US bond yields are now at a two-decade high.
“The investor sell-off has leached into G7 bond markets, with the rise in investor risk aversion negatively impacting emerging market bonds and currencies,” Bishop said.
She said South Africa had seen R12.7 billion in net sales of its debt since the end of September. Local bond yields rose to 9.0%, up from below 8.0% earlier in the year after the February Budget.
Lower commodity prices also added pressure on the rand. Commodity prices fell by 5.8% in September compared with August, Daily Investor reported.
Bishop said foreign sales of local bonds had been fairly small, and this had limited the rand’s fall.
JSE data for the week ended 25 September showed foreign investors had bought R101.24 billion in South African bonds so far in 2026. This was 37.5% lower than the R161.99 billion bought by the same time last year.
Foreign investors have been net buyers of local bonds since April. Some weeks in May, June, July and August showed net sales. In September, foreigners were net buyers every week.
Daily Investor reported that foreign investors could still turn into net sellers if the global move away from risk continues.
In the September 2026 Monetary Policy Review, Reserve Bank Governor Lesetja Kganyago said local reforms were key to protecting the bond market.
“Because of the adverse global environment, domestic reforms are our best growth option. This covers structural interventions, such as improving productivity in the transport and energy sectors,” he said.
Kganyago said the reforms had lowered South Africa’s risk premium and protected the country from the global bond selloff.
Source: this article is based on reporting by Daily Investor. Image: Daily Investor. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.