South African Policy Rate Seen Topping 8% Amid Leadership Crisis
- Forward-rate agreements show 90 basis points of hikes by July
- Ruling party set to meet to discuss President Ramaphosa’s fate
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Rate traders are bracing for an aggressive policy response by South Africa’s central bank to the leadership crisis that sent the rand into a tailspin this week.
Forward-rate agreements, used to speculate on interest rates, are now pricing in 90 basis points of rate hikes by July next year, up from 60 basis points at the start of the week. That would see the repo rate peak at about 8%, which would be the highest since the global financial crisis.