Zuma Crisis Can’t Suppress Rate-Cut Bets in South Africa: Chart

Bets for an interest-rate cut in South Africa have resurfaced less than a month after a cabinet reshuffle sparked two credit downgrades and a rand meltdown. Forward-rate agreements starting in 12 months, which predicted a rate increase just two weeks ago, are now pricing in a 25 basis-point reduction, based on the spread over the Johannesburg Interbank Agreed Rate. The rand’s quick rebound and inflows into the country’s bonds are bolstering the rate-cut expectations, according to Rand Merchant Bank.

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