Barclays' Near‑Term Rand Outlook
Barclays, in a Reuters‑published note dated 1 July 2026, expects the South African rand (USDZAR) to strengthen in the near term. The bank’s international factor model indicates that the rand is currently about 1 percent cheap relative to its fair value, which underpins the short‑term upside potential.
The South African Reserve Bank’s continued tightening of monetary policy is cited as an additional support for the rand. Barclays notes that the central bank’s stance reinforces the currency’s valuation advantage.
For the medium term, Barclays projects that the USDZAR pair will continue to rise as the U.S. dollar appreciates globally. However, the bank expects the pace of rand depreciation to be slower than in previous dollar‑appreciation cycles. This moderation is attributed to the rand’s “high‑carry” status within the Central and Eastern Europe, Middle East and Africa (CEEMEA) region, which should offset part of the pressure from a stronger dollar.
Overall, Barclays’ view combines a modest undervaluation signal (‑1 percent) with supportive monetary policy and a favorable carry profile, leading to an expectation of near‑term rand strength despite broader dollar gains.