The South African Reserve Bank kept rates unchanged, defying expectations for a hike, as USD/ZAR surges past its 200-day moving average.
The South African rand weakened sharply as USD/ZAR broke above its 200-day moving average at 16.5920, signaling renewed upward momentum. The move followed the South African Reserve Bank’s surprise decision to hold interest rates at 7.0%, with a 4-2 vote split against market expectations of a hike.
Headline inflation rose to 5.0% year-on-year in June, while core inflation edged up to 4.1%. The SARB revised its 2026 inflation forecast lower but still projects inflation above target through 2028, citing weak growth concerns. Governor Kganyago noted that May’s tightening is still feeding through the economy.
Key resistance levels now stand at 16.92, with further targets at 17.25 and 17.58/17.72. The pair’s break above the 200-day moving average marks its first such move since early April, suggesting a potential shift in trend.