The South African rand is expected to build on its recent gains as domestic and global conditions turn more supportive, according to analysts at Goldman Sachs. In a recent market note, the U.S. investment bank said improving macroeconomic stability, easing inflation pressures and a more constructive global risk environment are strengthening the outlook for the currency.
Goldman Sachs noted that the rand recorded its strongest annual performance in more than a decade in 2025, supported by a softer U.S. dollar and renewed investor appetite for emerging markets. The bank said the currency could continue to benefit if expectations of lower U.S. interest rates materialise and global growth remains resilient, factors that typically encourage capital flows into higher-yielding markets such as South Africa.
MarketScreener also pointed to South Africa’s exposure to commodities, particularly precious metals, as an additional tailwind, given firm global prices. According to the bank, relatively lower near-term political risk compared with some peers, alongside gradual improvements in fiscal and monetary conditions, could further support portfolio inflows and currency stability.
Goldman Sachs added that easing inflation and the prospect of lower borrowing costs may improve sentiment across South African asset markets, including equities and bonds. This broader confidence, the bank said, is likely to reinforce support for the rand in the months ahead, provided external shocks remain contained.
