Rand Loses Ground as South Africa’s Government and ANC Rally Behind Iran

After weeks of relative stability, the rand began weakening sharply against the United States (US) dollar from Sunday evening as South Africa’s government escalated its criticism of Washington while expressing support for Tehran.

The rand’s 3.3% decline is more than twice the movement recorded in the dollar index over the same period (the index tracks the strength of the dollar and in theory the rand should weaken in rough proportion to the extent the dollar strengthens), suggesting the fall is being driven by South Africa-specific political risks rather than broader global currency movements.

The shift coincides with a sequence of statements from both the South African government and the African National Congress (ANC) leadership.

On Monday, South Africa’s Department of International Relations and Cooperation endorsed an initiative by The Hague Group to pursue legal and diplomatic action against what it called Israel’s “disregard” for international law. South Africa co-chairs the group alongside Colombia.

The Hague Group is a diplomatic proxy that opposes US and Israeli interests in the Middle East. South Africa was instrumental in establishing the grouping shortly after it launched its case against Israel at the International Court of Justice (ICJ).

The Hague Group announcement comes only days after a joint US-Israel military operation targeted Iranian military infrastructure and cities. The operation killed several senior figures within Iran’s leadership.

Against that backdrop, President Cyril Ramaphosa released a statement arguing that “anticipatory self-defence is not permitted under international law” - a direct attack on the US and Israeli actions against Iran.

The ANC leadership has gone even further.

On Tuesday the party’s secretary-general, Fikile Mbalula, posted a message on X mourning the death of Iran’s hated dictator, Ali Khamenei, who was killed in the recent strikes. The statement expressed solidarity with the Iranian leadership and described Khamenei’s death as a significant loss.

The timing and tone of these statements have reinforced perceptions among analysts that South Africa’s foreign policy is increasingly shaped by ideological alignment against the US rather than economic or diplomatic considerations.

This perception has unsettled financial markets.

Investors are already sensitive to South Africa’s geopolitical positioning. Analysts warn that a pattern of diplomatic alignment in favour of Iran risks deepening tensions with major Western trading partners.

The immediate concern in markets is not simply the diplomatic rhetoric itself but the potential consequences that could follow. These include strained relations with Washington, risks to preferential trade arrangements, and even the possibility of targeted sanctions against political figures or institutions.