South Africa’s rand concluded 2025 with its largest annual gain in 16 years, appreciating nearly 13 percent against the U.S. dollar, as a combination of rising commodity prices and improved domestic economic indicators bolstered investor confidence, Reuters reported.

The currency’s advance was underpinned by strong performance in gold and platinum, South Africa’s primary export commodities, which benefitted from global demand and a weaker U.S. dollar. The greenback declined approximately 9 percent against a basket of major currencies, its worst annual performance in eight years, amid expectations of Federal Reserve rate cuts, fiscal concerns, and political uncertainty in the United States, Reuters noted.

Domestically, the rand received support from controlled inflation, modest fiscal improvement, and measures enhancing financial transparency. The country’s removal from the Financial Action Task Force’s “grey list,” a credit-rating upgrade by S&P Global Ratings, and a formal adjustment to the inflation target contributed to strengthening investor sentiment.

Local equities and bonds reflected the positive momentum. The Johannesburg Stock Exchange Top-40 index remained near record levels, largely supported by mining stocks, while the yield on South Africa’s benchmark 2035 government bond fell to 8.205 percent.

Johann Els, chief economist at PSG Financial Services, indicated that the same factors could continue to support the rand in 2026. “I expect the rand to strengthen further, potentially reaching a 15 handle,” he said.

The performance of the rand occurred during the first full year of South Africa’s coalition government, which faced budgetary debates and international trade uncertainties. Despite these challenges, local financial markets demonstrated resilience, benefiting from both global commodity trends and domestic economic reforms.