The South African rand strengthened to around 16.3 per USD, its highest level since mid-April, as growing optimism over a potential US-Iran deal boosted risk appetite and weighed on the dollar, while firmer precious metals prices added further support. Iran and the US appear closer to a framework to end the war and reopen the Strait of Hormuz, after President Trump said a memorandum of understanding had been largely negotiated, while cautioning he would not “rush” a deal. Domestically, investors are closely watching the South African Reserve Bank’s Monetary Policy Committee meeting scheduled for May 28. A 25 bps rate hike is widely anticipated, although a split vote is possible. While some economists see scope for tightening to contain potential second-round inflation pressures following April’s rise in inflation to 4.0% from 3.1%, others argue that current policy may already be restrictive enough, allowing policymakers to pause and evaluate whether the recent increase is transitory.