Fixed Income Chart Book: 4 August 2015
Local rate hikes have begun and US hikes should follow before the end of the year
The South African Reserve Bank (SARB) has begun its rate hiking cycle. We expect one more hike from the SARB in 2015 while we expect the Fed to begin its rate hikes before year-end. As a result, dollar strength should resume, which will put further pressure on the rand.
Chart 1: The SARB hikes interest rates by 0.25% in July
- The SARB’s hawkish tone in previous meetings has finally culminated in a rate hike. While the consensus among participants were spilt 50/50 between a hike of 0.25% and no hike, the repo rate finally moved up from 5.75% to 6.00%.
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