Chart of the Week
The Rand strengthened meaningfully through 2025, with the ZARX Index rising steadily from 72.2 in early January to 79.2 by year-end, remaining above its one-year moving average throughout the second half of 2025 and carrying this momentum into early 2026.
The ZARX Index is a measure of the external value of the Rand (ZAR) against the currencies of South Africa’s most important trading partners, similar to the U.S. Dollar Index (DXY). The basket of currencies used in the index includes USD, EUR, CNY, INR, JPY and GBP, weighted by combined import and export shares. Exchange rates are converted into foreign currency units per rand and then combined using geometric weighting to construct the index, with the resultant value indexed to a base of 100 from January 1, 2015. To differentiate short-term exchange rate volatility from longer-term periods of rand strength or weakness, ZARX is also assessed in relation to its one-year moving average, giving more insight into underlying currency trends.
This long-term recovery was supported by record-high precious metal prices alongside a marked improvement in investor sentiment following significant fiscal reforms, while a sovereign credit rating upgrade, a lower inflation target, and broad-based US dollar weakness further reinforced the rand’s position as one of the stronger-performing emerging market currencies.
*Deon Gous is an equity analyst.**
The ZARX Index is a measure of the external value of the Rand (ZAR) against the currencies of South Africa’s most important trading partners, similar to the U.S. Dollar Index (DXY). The basket of currencies used in the index includes USD, EUR, CNY, INR, JPY and GBP, weighted by combined import and export shares. Exchange rates are converted into foreign currency units per rand and then combined using geometric weighting to construct the index, with the resultant value indexed to a base of 100 from January 1, 2015. To differentiate short-term exchange rate volatility from longer-term periods of rand strength or weakness, ZARX is also assessed in relation to its one-year moving average, giving more insight into underlying currency trends.
This long-term recovery was supported by record-high precious metal prices alongside a marked improvement in investor sentiment following significant fiscal reforms, while a sovereign credit rating upgrade, a lower inflation target, and broad-based US dollar weakness further reinforced the rand’s position as one of the stronger-performing emerging market currencies.
*Deon Gous is an equity analyst.**
