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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
March 11, 2026

South African Gold and Foreign Exchange Reserves for February 2026

The South African International Liquidity Position, measured by Net Gold and Foreign Exchange Reserves, showed growth in USD terms but declined in Rand terms for February 2026. The Rand appreciated notably against the US Dollar from December to January 2026, according to official reports from the South African Reserve Bank. Reserves increased by nearly USD 960 million, following a USD 3.7 billion rise in January 2026. The sustained high gold price played a significant role in supporting reserves from January through to February, with gold prices remaining 81% higher than the same period in 2025 at this stage.

In USD terms, foreign reserves increased in February 2026 compared to the previous month. The Reserve Bank continued to purchase US Dollars in open market operations as the Rand gained value against the US Dollar throughout February, thereby impacting South Africa’s net international liquidity position at that time.

Key commodities such as gold, oil, platinum, and coal offer valuable insights into South Africa’s mining sector and inflation outlook. Monitoring these trends is vital for assessing inflation prospects, especially amid ongoing international developments and potential trade restrictions with the US following August’s tariff measures.

Tracking these movements is crucial, as inflation expectations will influence the South African Reserve Bank’s (SARB) interest rate decisions in the early stages of 2026, especially given the current conflict in the Middle East. A stable Rand for now and notably higher oil prices are conducive to expected higher inflation forecasts for now; this may, however, change quickly if the US-Iran conflict is not resolved speedily. However, global continued geopolitical tensions and possible changes to trade agreements, such as the African Growth and Opportunity Act (AGOA), which has been extended by one year by the US administration, could introduce increased market volatility as the 30% reciprocal tariffs remained intact on South African exports to the US market in general. With recent US tariffs and the Federal Reserve’s decision to cut interest rates in December 2025, the Rand may experience continued short-term fluctuations, which could impact both international markets and South Africa’s economic outlook for the remainder of the year.

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A Watershed Moment: Global Ceasefire and Massive Oil Correction Offer Crucial Relief for the SA Economy

A sudden global shift has delivered much-needed relief for South Africa. Following a Middle East ceasefire, oil prices have dropped sharply and the Rand has strengthened—easing pressure on fuel costs and inflation. While earlier price spikes still weigh on the outlook, this combined correction offers a critical window for economic stability, improved consumer confidence, and renewed growth momentum.

The Great Fuel Buffer

South Africa finds itself balancing global energy shocks with decisive local action. As rising oil prices threaten to strain consumers and key industries, government intervention has softened the immediate impact—highlighting both the urgency of the moment and the need for smarter, more resilient fiscal tools to manage future volatility.

SARB opts for Strategic Resilience

The South African Reserve Bank has opted for a “hawkish hold,” maintaining the repo rate at 6.75% despite headline inflation hitting a milestone low of 3.0%. Governor Lesetja Kganyago emphasised that while the inflation target has been met, the MPC remains wary of a potential “energy tax” on the economy, driven by global oil prices surging above $100 per barrel. Consequently, the Bank has adopted a cautious, forward-looking stance, slightly lowering the 2026 GDP growth forecast to 1.1% to account for these external shocks and ensure long-term currency stability.

Navigating the Geopolitical Crosswinds

South Africa faces renewed inflation risks despite brief market relief, driven by rising fuel costs and import dependence. The SARB is likely to hold interest rates to protect price stability.

The Perfect Storm:

This morning, South Africans received what should have been a crowning achievement for the South African Reserve Bank (SARB). Data from Stats SA revealed that the Consumer Price Index (CPI) cooled to 3.0% in February, down from 3.5% in January. This lands the country perfectly on the SARB’s new, more ambitious inflation target.