Traders have scaled back bets on additional South African interest-rate hikes after a US-Iran peace deal sent oil prices tumbling, potentially reducing inflationary pressures.<\/p>\n
Forward-rate agreements are now pricing in 15 basis points of tightening at the South African Reserve Bank\u2019s 23 July policy meeting, down from 30 basis points a week ago. The contracts are pricing in a total of 32 basis points of rate hikes this year, compared with 70 basis points a week ago. That implies just one full quarter-point increase by the November rates meeting.<\/p>\n
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Policymakers last month raised borrowing costs by 25 basis points to 7%, delivering their first increase in three years as inflationary pressures intensified because of the Iran war. They also signalled that further tightening may be warranted if the conflict drags on.<\/p>\n
Inflation in Africa\u2019s biggest economy probably quickened to 4.7% in May from 4% a month earlier, according to the median estimate of 18 economists in a Bloomberg survey. The central bank targets inflation at 3%.<\/p>\n
Read:
SA GDP surprises to the upside as headwinds build
Sarb ties SA rate path to Iran war timeline<\/p>\n
Following the weekend\u2019s peace agreement, however, investor expectations of average inflation over the next five years as measured by breakeven rates fell by 16 basis points to 4.23%.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n<\/p><\/div>\n
#Traders #cut #ratehike #bets #Iran #peace #deal<\/p>\n","protected":false},"excerpt":{"rendered":"
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