South Africa’s 10-year bond yield climbed to around 8.50%, its highest level since mid-April, as investors assessed the latest inflation figures and their implications for the future path of interest rates. The annual inflation rate in South Africa inched up to 3.1% in March from 3.0% in February, remaining close to the South African Reserve Bank’s (SARB) 3% target and indicating that price pressures are still relatively contained.
Nevertheless, rising fuel costs linked to the conflict in the Middle East are expected to push inflation higher from April onwards. Presenting the April 2026 Monetary Policy Review, Governor Lesetja Kganyago reaffirmed that the central bank remains firmly committed to its 3% inflation target, even as a new global shock threatens to cloud the outlook.
The SARB expects headline inflation to be higher in the near term, averaging 3.7% this year, before gradually returning to target by late 2027. Kganyago signaled a more cautious policy stance, cautioning that “overall, interest rates are likely to remain elevated for longer.”
