The South African rand strengthened to around 16.3 per USD, near its highest level since August 2022, buoyed by safe-haven flows into gold and other precious metals amid a turbulent geopolitical landscape. Traders also weighed December’s inflation data and its potential impact on the central bank’s next moves. Annual inflation edged higher to 3.6% from 3.5%, in line with expectations, though remaining well within the SARB’s 1-percentage-point tolerance band around its new 3% target. The 2025 average inflation rate hit a 21-year low of 3.2%, below the central bank’s 3.3% forecast, raising the possibility of a rate cut at its upcoming policy decision on January 29. SARB Governor Lesetja Kganyago told Bloomberg TV at Davos that the new 3% target has helped bring the country into a low-inflation environment, and he is confident that inflation will remain close to that level throughout the year.