South Africa’s 10-year bond yield hovered around 8.65%, edging down from recent two‑week highs as investors responded to easing tensions between Israel and Iran while also digesting stronger‑than‑expected GDP data. Both countries agreed to suspend attacks on each other, but caution lingered, with Washington–Tehran negotiations still short of a durable agreement and the Strait of Hormuz remaining closed.
On the domestic front, South Africa’s economy grew by 0.5% in Q1, surpassing expectations and extending its expansion to six consecutive quarters, underscoring resilience in a difficult global environment. In a further positive development, Fitch recently upgraded the country’s credit rating, following a similar move by Moody’s in late May.
On the monetary policy side, the SARB raised its key interest rate by 25 bps to 7% in late May—its first increase in three years—in an effort to rein in oil‑driven inflation, and cautioned that additional hikes may be necessary if the conflict persists.
