South African Rand Amid Reforms: Average Forecast vs. Official Projections

PoolJumper · 2026-02-13T01:16:12+00:00

The South African rand is viewed as an undervalued asset with growth potential, according to a survey suggesting an expected fair value of 15.64 ZAR/USD. While most investors are optimistic, the South African Reserve Bank forecasts a weaker rand. Future strength hinges on effective fiscal reforms.

PoolJumper

2026-02-13 01:16:12

Abstract generation in progress

South African rand is currently viewed by many market participants as an undervalued asset with growth potential. According to Jin10 research, involving 14 economists and investors, the average expected fair value of the rand against the US dollar is 15.64. This figure reflects the optimism of most respondents regarding the currency’s potential strengthening amid planned government economic reforms.

Average Investor Forecast and Range of Estimates

The survey results show an interesting distribution of opinions among experts. Half of the respondents consider the currency undervalued and expect it to strengthen. Three experts see the current rate as close to fair value. Meanwhile, four analysts believe the rand is overvalued. The range of fair value estimates varies from 12.23 to 18, demonstrating differing forecasts about the currency’s potential.

Official Position of the South African Reserve Bank

The South African Reserve Bank adopts a more conservative stance compared to optimistic investors. The central bank forecasts a weakening of the rand to 16.73 by the second quarter of 2026. The bank also developed medium-term projections, assuming the exchange rate will fluctuate between 16.54 and 17.10 until the end of 2028. These official forecasts contrast with the more optimistic expectations of private investors.

Fiscal Policy as a Driver of Rand Dynamics

Frank Blackmore, an economist at KPMG in Johannesburg, offers a more positive outlook, predicting the rand will strengthen to 15.50 by the end of this year. He believes fiscal policy will be the main factor determining the currency’s success in 2026. Blackmore emphasizes that the announcement of the national budget, scheduled for February 25, will be a critical test of the government’s ambitions regarding the implementation of promised economic reforms.

Thus, the near future of the rand will depend on how effectively the government implements fiscal reforms. The average forecast of 15.64 remains a compromise between private sector optimism and the cautiousness of the central bank.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.