The rand weakened on Monday, with global risk appetite dented by a weekend attack on Saudi Arabian refining facilities that hit global oil supplies and saw prices spike.
At 1535 GMT, the rand was down 0.22% at R14.61 per dollar, having hit a session low of R14.71.
The rand, along with other emerging market assets, last week benefited from increased risk appetite after Washington and Beijing officials made concessions on retaliatory tariffs.
The European Central Bank’s (ECB) decision to cut interest rates and its promise of more stimulus also lent support.
However, the risk-on mood soured after an attack on Saudi Arabian refining facilities, leading investors to seek out safe-haven assets like the Japanese yen and Swiss franc.
Oil prices surged nearly a fifth following the strikes, which knocked out more than 5% of global oil production. The currencies of major oil importers, such as the rand and Turkey’s lira, weakened.
“South Africa is an oil importer and the surge in the oil price is negative for the country, particularly from an inflation point of view, if it is sustained,” said Investec chief economist Annabel Bishop.
“The rand is likely to continue to remain volatile… with September a month that can see a lot of churn as market players return from summer vacations,” Bishop said.
Bonds also weakened, with the yield on the benchmark instrument due in 2026 adding 1 basis points to 8.225%.
On the bourse, stocks strengthened, with the Johannesburg All-share index up 1.3% to 57,854 points, while the benchmark Top 40 index rose 1.3% to 51,802 points.
Leading the blue chips was petrochemicals firm Sasol, which gained nearly 10% to R306.00 on rising oil prices.
“Sasol would have bought their oil stocks at much lower prices, so their margins improve substantially on a much higher oil price,” said Ryan Woods, trader at Independent Securities.
US crude climbed 11.4% to $61.12 per barrel and Brent was last at $67.26, up 11.7% on the day.
Financials were also in the black, with the banking index up 3.7%, just shy of a two-month high.
Nedbank rose 5.3% to R251.24 and FirstRand gained 4.6% to R67.75, while Absa gained 3% to R170.15 and Standard Bank ticked up 2.9% to R193.30.