Traders Prepare for a Rate Hike in South Africa as the Rand Tanks

Traders are pricing in rate hikes in South Africa for the first time in more than six months. Inflationary pressures may rise after Finance Minister Malusi Gigaba painted a bleak picture of the country’s finances on Wednesday, sending the rand tumbling against the dollar and bond yields soaring. Forward-rate agreements beginning in 12 months, which as recently as last week had discounted a rate cut, rose 20 basis points to trade above the benchmark Johannesburg Interbank Agreed Rate.

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