{"id":65136,"date":"2024-04-27T06:40:57","date_gmt":"2024-04-27T06:40:57","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa"},"modified":"2024-04-27T07:11:16","modified_gmt":"2024-04-27T07:11:16","slug":"interest-rate-hike-warning-for-south-africa","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa","title":{"rendered":"Interest rate hike warning for South Africa"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>While currently not a likely move for the South African Reserve Bank (SARB), the possibility of an interest rate hike for the country can\u2019t be discounted, as the \u2018higher for longer\u2019 narrative grips global markets.<\/p>\n

Sentiment around interest rate cuts in South Africa has almost completely flipped in the first four months of 2024\u2014moving from expectations of several rapid cuts to rates early on to hopes of maybe one cut before the end of the year.<\/p>\n

In fact, several economists and analysts have nixed the prospect of any interest rate cuts this year at all, pushing the start of the downward cycle into 2025.<\/p>\n

Despite the more muted sentiment, talk of the picture flipping completely\u2014and the SARB actually hiking rates\u2014has not really entered the picture. But the whispers are there.<\/p>\n

The first mention of possible rate hikes popped up on 11 April, when forward-rate agreements\u2014used to speculate on borrowing costs\u2014completely erased the prospect of interest rate cuts in South Africa, even suggesting a possible hike.<\/p>\n

This is pertinent because it only took markets two weeks to catch up to this narrative (i.e., \u2018no rate cuts in 2024\u2032 is now a more widely accepted forecast).<\/p>\n

According to the Bureau for Economic Research (BER), other red flags are now being raised that also point to the possibility.<\/p>\n

Data out of the United States is supporting the narrative of \u201chigher for longer\u201d, the group said.<\/p>\n

The US GDP growth rate essentially halved from 3.4% q-o-q in Q4 to 1.6% in Q1 \u2013 well below expectations for a mid-2% figure.<\/p>\n

\u201cWhile growth was lower than expected, the deflator (an inflation measure) was higher than anticipated and accelerated from 1.6% in Q4 to 3.1%. Worryingly, the core measure for Q1 rose from 2% to 3.7% \u2013 also higher than expected,\u201d the BER said.<\/p>\n

\u201cThis data would fit with the higher-for-longer narrative we have seen dominating of late. In the end, the concerns about persistent price pressure won, and markets are now turning to just one rate cut, in the November Fed meeting of the year,\u201d it said.<\/p>\n

With this narrative sticking in markets, the dollar has seen some notable strength, impacting other countries \u2013 particularly emerging markets like South Africa.<\/p>\n

The rand has been trading notably weaker, failing to break under the R19\/$ mark, largely due to the turn in sentiment on rate cuts in the US.<\/p>\n

The BER said that a victim of the higher-for-longer dollar strength seems to be Indonesia\u2014and this is possibly the first of many.<\/p>\n

\u201cThe Bank of Indonesia delivered a surprise hike last week as the rupiah weakened to a four-year low, and the central bank acted to \u2018strengthen the stability of the currency\u2019,\u201d the BER said.<\/p>\n

The rand is also under pressure, the economists said.<\/p>\n

\u201c(While it) would not be this explicit on exchange rates, (the SARB) would not hesitate to act should it start to worry about the second-round implications on the inflation outlook of a weaker rand,\u201d the BER said.<\/p>\n

The Reserve Bank has never been explicit about its policy moves, stating only that it will pursue its mandate of protecting the currency. Indications are that its next move will be a hold on rates, but this does not discount shocks in the future should prevailing conditions prove to be a problem.<\/p>\n

\u201c(The SARB) published their Monetary Policy Review last week. The review was in line with recent statements and speeches in the sense that it stressed caution on the way forward and concern about sticky inflation,\u201d the BER said.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. While currently not a likely move for the South African Reserve Bank (SARB), the possibility of an interest rate hike for the country can\u2019t be discounted, as the \u2018higher for longer\u2019 narrative grips global markets. Sentiment around interest rate cuts in South Africa has almost completely flipped in the first four months […]<\/p>\n","protected":false},"author":84,"featured_media":65135,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-65136","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nInterest rate hike warning for South Africa - South Africa<\/title>\n<meta name=\"description\" content=\"While currently not a likely move for the South African Reserve Bank (SARB), the possibility of an interest rate hike fo ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Interest rate hike warning for South Africa\" \/>\n<meta property=\"og:description\" content=\"While currently not a likely move for the South African Reserve Bank (SARB), the possibility of an interest rate hike fo ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-27T06:40:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-27T07:11:16+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/04\/sm_1714189139.979919.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Interest rate hike warning for South Africa\",\"datePublished\":\"2024-04-27T06:40:57+00:00\",\"dateModified\":\"2024-04-27T07:11:16+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa\"},\"wordCount\":597,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/04\/sm_1714189139.979919.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/interest-rate-hike-warning-for-south-africa\",\"name\":\"Interest rate hike warning for South Africa - 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