Big shift in expectations for interest rates in South Africa

• The Reserve Bank of South Africa has decided to hold interest rates, contrary to market expectations of multiple hikes in 2026.
• The decision was based on the Reserve Bank's current inflation forecasts for the remainder of 2026, which have been adjusted downwards to 4.0%, citing relatively low food inflation.
• The Reserve Bank has warned that additional interest rate hikes are possible in the future, based on inflation forecasts and fuel prices, which could impact South Africa's already-stagnating economy.