File: South African Rands. GettyImages/RapidEye
JOHANNESBURG - The South African rand could strengthen in the coming months as investors return to emerging markets despite ongoing global uncertainty.
According to a Bloomberg report carried by the Daily Investor, rising oil prices and expectations that global interest rates will remain elevated are helping support commodity-linked currencies.
The carry trade where investors borrow in low-interest currencies and invest in higher-yielding markets — has rebounded strongly since losses linked to the Iran conflict earlier this year.
Analysts say South Africa could benefit if foreign investors continue buying local bonds and equities, especially as political stability and easing inflation improve confidence in the economy.
However, ongoing geopolitical tensions and volatile oil prices remain key risks for the rand and broader emerging markets.