BNP Sees South Africa Hiking Rates at Consecutive Meetings to Preserve Credibility

The South African Reserve Bank will likely raise interest rates at its next two meetings to rein in inflation that’s set to surge because of energy supply-side shocks caused by the war in Iran, BNP Paribas said.

The central bank will probably lift the policy rate by 25 basis points at the May 28 and July 23 gatherings of its monetary policy committee, implying that it “will take no chances in terms of meeting its medium-term inflation target,” BNP’s Jeffrey Schultz and colleagues wrote in a note on Tuesday. It “will act swiftly to preserve its hard-won credibility gains under its new 3% inflation target,” they said.