The South African rand weakened in afternoon trade on Thursday, after Iran and the United States exchanged fire, marking a week-long escalation that has pushed up oil prices again and revived concerns about inflation and disruption to energy supplies.
At 1419 GMT, the rand traded at 16.4150 against the dollar, down about 0.5% from its previous close.
The U.S. launched two big waves of air strikes on Wednesday after reimposing a naval blockade on Iranian ports; Iran responded by firing missiles and drones at U.S. military bases in neighbouring countries and closed shipping through the Strait of Hormuz.
Iran has also asked Yemen’s Houthi movement to stand ready to close the Red Sea oil route if the United States strikes Iranian power infrastructure.
Global oil prices rose more than 1% as concerns over Middle East energy supplies increased, while the greenback was up nearly 0.2% against a basket of currencies.
“The environment favours selective emerging market long positions but demands vigilance regarding geopolitical spillovers, with asymmetry in rand risks persisting for now,” said ETM analytics in a research note.
On the Johannesburg Stock Exchange, the Top-40 index was steady.
South Africa’s benchmark 2035 government bond was weaker, as the yield rose 3 basis points to 8.42%.
