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South Africa Rate Bets Pared in Meeting Too Close to Call

  • 16 of 26 economists see the central bank leaving rate on hold
  • Inflation forecast to breach top of target range next year
Updated on

Investors pared bets that South Africa’s central bank will tighten monetary policy on Thursday in a decision that’s confounding traders and policy makers as they anticipate the U.S. Federal Reserve’s first rate increase in almost a decade.

Forward-rate agreements starting in one month, used to speculate on borrowing costs, show a less than 40 percent chance that the Reserve Bank will raise the benchmark rate by 25 basis points to 6.25 percent, according to data compiled by Bloomberg. That’s down from close to 70 percent probability on Nov. 13. Of the 26 economists surveyed by Bloomberg, 16 predict the rate will stay unchanged, while the rest expect a quarter-point increase.