Traders Hold South Africa Rate-Hike Bets Even as Inflation Slows
- Deadly riots emerge as risks to economic growth, inflation
- Traders and economists divided on timing of first rate hike
This article is for subscribers only.
Traders held bets that South Africa’s central bank will increase interest rates this year, even after data suggested that inflation through 2023 may have peaked.
Forward-rate agreements, used to speculate on borrowing costs, show traders see a 47% chance of a 25-basis point hike Thursday and contracts starting in four months are pricing in a more than 90% chance that the repurchase rate will be 50 basis points higher by year-end. However, economists in a Bloomberg survey only predict tightening in the benchmark from the first quarter of next year.