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(Bloomberg) — Trading in the rand rose sharply in the first quarter as volatility induced by the Iran war pushed up average daily turnover by as much as 20%, according to the South African Reserve Bank.
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Currency transactions against the rand increased to $13.7 billion from $11.4 billion in the previous three months, while transactions in third currencies increased to $5.3 billion from $4.6 billion, the SARB said in its Quarterly Bulletin published on Tuesday.
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“The increase in turnover could be attributed to the volatility in the rand exchange rate due to the war in the Middle East,” it said. “The increase in FX transactions against the rand in the first quarter of 2026 was driven by increased participation across all counterparties.”
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The rand is often viewed as a proxy for other emerging-market currencies because the depth and liquidity of the South African foreign exchange market makes it easier to execute trades for investors seeking to take a position on other EM assets.
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While the currency initially weakened against the dollar after the US and Israel attacked Iran on Feb. 28, it has since recovered some of that lost ground, despite the headwinds caused by higher energy costs for a nation reliant on oil imports. The real effective exchange rate of the rand has increased by 3.5% from March 2025 to March 2026, the central bank said.
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(Updates with other highlights from the Quarterly Bulletin)
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