South African rand holds gains after SARB focuses on lower inflation target
JOHANNESBURG - The South African rand held most of the previous day's gains in early trade on Friday, after the central bank stressed its strong preference for a lower inflation target at a monetary policy announcement.
The South African Reserve Bank (SARB) presented detailed modelling of the impact of a 3% inflation target, compared to the 4.5% level it aims for at the midpoint of its current 3% to 6% target range.
The SARB, which resumed interest rate cuts on Thursday after a pause in March, added that its Monetary Policy Committee felt a 3% target was "more attractive" and said it would continue to consider scenarios based on that target at future rate meetings.
"Investors focused on the implications of a lower target, namely lower inflation, reduced interest rates, bond market inflows, and stronger long-term growth, which further support the rand," ETM Analytics said.
Other factors that point to more rand resilience include a solid trade surplus, tight credit cycle and signs of prudence in government finances, the research firm added in a note.
At 0650 GMT, the rand traded at 17.8425 against the dollar , about 0.1% weaker than Thursday's closing level.
Weighing against the rand was a stronger dollar on global markets.
The benchmark 2035 government bond was stronger in early deals, as the yield fell 4 basis points to 10.13%.
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Roads in Kenge, Kikwit, Tshikapa, Kamuensha, and Mbuji-Mayi have been completely rehabilitated, new stretches of road built, and urban roads modernized. Numerous examples of socioeconomic infrastructure have also benefited from the financial support of the African Development Bank Group ( helping to transform the daily lives of hundreds of thousands of Congolese. A multi-sectoral mission from the government of the Democratic Republic of Congo (DRC) and the African Development Bank witnessed the impact of these investments during field visits to the five municipalities in western DRC between 5 and 19 May 2025. More specifically, the three projects, financed by the Bank, focus on rehabilitating road infrastructure, enhancing air safety, and improving access to basic social services. Health centres, hydraulic structures equipped with modern technology, provincial rural markets, schools, a refurbished runway in Mbuji-Mayi, and air safety equipment meeting international standards are just some of the successes the joint mission was able to witness. "The mission measured the concrete impact of the projects supported by the Bank in Kasai. From roads to social infrastructure and air safety, progress is visible and is transforming the lives of the population. We pay tribute to the work completed and remain committed to consolidating the gains achieved, in particular with the extension of the Mbuji-Mayi runway to make it a hub that meets international standards," commented Mohamed Coulibaly, Country Programme Manager in charge of the Bank Group's Office in the Democratic Republic of Congo. Opening a key route in the road network The first stage of the mission concerned the project to rehabilitate the Kinshasa/Ndjili-Batshamba section of national road no. 1. The project involves the rehabilitation of 622 kilometres of road between Kinshasa and Batshamba via Kenge and Kikwit, a key route in the Congolese road network. In the past, this strategic corridor was virtually impassable due to the advanced deterioration of the road surface and a series of sinkholes, and took several days or in some cases weeks, to drive along. Thanks to $68.57 million in funding from the African Development Bank, the work carried out now means the route can be travelled safely in less than a day. This improves connectivity between the capital and the provinces of Mai-Ndombe, Kwango, Kwilu and Kasaï. "In addition to asphalting the road, the Bank has financed the construction and equipping of schools, health centres, boreholes, rural markets, social reintegration centres, administrative buildings, a modern market and weigh stations along the route, as well as the rehabilitation of over 700 kilometres of rural roads," explains Jean Luemba, the RN1 project coordinator. The Bank has also provided substantial logistical support (vehicles and IT equipment) to the state structures involved in the projects. Ultimately, this initiative will benefit over 19 million people by facilitating access to markets, improving the availability of agricultural products and food security, and supporting mobility and economic activities. Significant progress in social infrastructure In terms of social infrastructure, the achievements of the second phase of the Project for the Reinforcement of Socioeconomic Infrastructure in the Central Region (PRISE II) are significant: most of the construction work on schools, health centres, public latrines, and rural markets has been completed or is nearing completion. The execution rate is estimated at 75%. As for the 41 schools under construction, most are ready for handover. The same applies to the 40 health centres, whose buildings have been completed. Public markets are also making good progress, with several structures already operational. In addition, the project has planned community awareness-raising and vocational training activities, including training young people in plumbing, promoting hygiene and local water governance. During the joint mission, the national authorities reiterated their willingness to broaden the scope of the "PRISE" project by integrating geophysical studies into the Drinking Water Supply and Sanitation Programme, thus supporting the national ambition of universal coverage in this area. The project's aim is to reach over 870,000 direct beneficiaries in 10 provinces, by improving access rates to water, sanitation, health and education. Advanced airport infrastructure In the air transport sector, a visit to the second phase of the Priority Air Safety Project (PPSA2) revealed remarkable progress in the rehabilitation and extension of the Mbuji-Mayi runway. Around 85% of the 320-metre runway has already been completed. The new tarmac is 95% complete, while the ramp, service road and runway end safety areas (RESA) are 70 to 75% complete. Vital technical infrastructure such as the control tower, power plant, fire station, and lighting system are nearing completion. At Kisangani-Bangoka international airport, the aircraft movement areas, taxiways and tarmac have been completely rehabilitated, and two turn pads have been installed. In addition, six radio navigation systems (DVOR/DME) have been deployed at Goma, Mbuji-Mayi, Kindu, Kinshasa, Lubumbashi, and Mbandaka, enhancing the safety of domestic flights. Eight VHF radio channels have also been installed at several secondary airports to improve aeronautical communication. The upgrading of equipment, combined with capacity-building for technical staff, has reduced the number of air accidents in the DRC from an average of 10 to one a year. The project also includes training for the Régie des voies aériennes staff in the following areas: safety and air bases, maintenance techniques and project management for the Régie, and air transport inspectors for the Civil Aviation Authority. At the end of the visit, the mission underlined the technical quality of the work carried out, the commitment of the contractors and local ownership. In Tshikapa, a local resident declared: "Tshikapa today is the African Development Bank!", testifying to the visibility and tangible impact of the projects on the daily lives of the local population. These results also illustrate the importance of close coordination between the Bank, the Congolese government and technical and financial partners, including the European Union and the World Bank, which were also involved in the construction of certain sections of the RN1. Distributed by APO Group on behalf of African Development Bank Group (AfDB).
