South Africa’s 10-year bond yield remained above 8.60%, hovering near a two‑week high, as investors assessed developments in the Middle East alongside rising expectations of interest rate hikes. Iran has reportedly put forward a new proposal to reopen a key shipping route, but President Trump indicated that the blockade will remain in place until a broader agreement is reached, while diplomatic efforts to resolve the conflict have once again stalled.
At the same time, markets are closely tracking policy signals and decisions from major central banks. The South African Reserve Bank has maintained a cautious stance in recent months, repeatedly warning that external shocks, rand weakness, and persistent domestic price pressures continue to pose upside risks to inflation. March CPI remained close to the SARB’s 3% target, but rising fuel and electricity costs could push inflation above that level in the coming months, heightening the probability of an interest rate hike. Governor Lesetja Kganyago has recently reiterated that the central bank stands ready to act should price pressures intensify.
