Bank of America has forecast that the South African Reserve Bank (SARB) will raise interest rates by 25 basis points at its upcoming policy meeting next week.
The US lender’s projection comes despite broader expectations that inflation in South Africa is set to ease later this year, suggesting that persistent inflationary pressures are keeping the central bank on a hawkish trajectory.
The bank argues that elevated inflation expectations could prompt the SARB to deliver another tightening move to anchor price stability.
This stance highlights the tension between forward-looking inflation forecasts and current economic realities, where the central bank may prioritize preventing expectations from becoming unanchored over reacting to lagging headline data.
For investors, the forecast implies continued pressure on the rand and local bond yields if the hike materializes.
The move would signal that the SARB remains cautious about declaring victory over inflation too early, even as global markets rally on hopes of easing geopolitical tensions and cooling oil prices.