Traders Add to South African Rate-Cut Bets After Inflation Cools

Traders raised bets that South Africa’s central bank will resume its rate-cutting cycle next month after inflation slowed to its lowest level in almost five-years in March, taking it below the floor of the central bank’s target range.

Forward-rate agreements covering the May 27-29 monetary policy committee meeting dropped to price in 17 basis points of easing, or a 68% chance of a 25 basis point cut, up from 52% before the data. Traders are also pricing in a total reduction of 49 basis points by year-end.