Markets Now See South African Key Rate Cut by Year-End

(Bloomberg) --

Markets are betting against the South African Reserve Bank’s forecasts when it comes to the benchmark interest rate. Forward-rate agreements, used to speculate on interest rates, predict a 68 percent chance of a 25 basis-point decrease in borrowing costs by year-end. That’s despite the central bank’s quarterly projection model implying an increase of the same magnitude to 7 percent in 2019.

To contact the reporter on this story: Prinesha Naidoo in Johannesburg at pnaidoo7@bloomberg.net

To contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Ana Monteiro

©2019 Bloomberg L.P.