UBS has revised its forecast for the South African rand, expecting further appreciation against the US dollar throughout 2026. The bank cites a combination of favorable external conditions and gradual progress in domestic reforms.

According to analysts, the rand was supported in February by high precious metal prices, expectations of a Fed rate cut, stable global growth, and robust investor demand for high-yield assets outside the US.

The USD/ZAR pair is currently near UBS's Q1 2026 target of 16.0. Going forward, the bank forecasts the spot rate to strengthen to 15.8 in Q2–Q4 2026, based on the continued attractive yields of South African assets and a moderately positive external environment. UBS notes that the rand has demonstrated resilience even amid global market volatility and periodic deterioration in risk appetite.

At the same time, analysts warn of the risks of a correction. Potential weakening is possible in the event of a global economic slowdown, a more assertive stance by the Federal Reserve, a deterioration in US-South African relations, or a slowdown in the pace of domestic structural reforms.