The South African rand strengthened to 16.2 per US dollar, reaching its strongest level since early March, as investors shifted toward risk-sensitive assets following news that the US and Iran had reached a preliminary agreement to end their three-month conflict. The agreement, which includes lifting the US blockade and reopening the Strait of Hormuz, is scheduled to be signed in Switzerland on Friday. However, markets remain cautious as further details are awaited and uncertainty persists over the future of Iran’s nuclear program. The sharp decline in oil prices has also supported sentiment by easing inflationary pressures and reducing expectations of additional interest rate increases. In its latest Financial Stability Review, the South African Reserve Bank (SARB) noted that a prolonged conflict could have justified another rate hike later this year. On May 28, the central bank raised its benchmark interest rate by 25 basis points to 7%, marking its first increase in three years.