South Africa’s 10-year government bond yield eased to near 8.35% from recent one-month highs around 8.45%, amid rising expectations of looming rate cuts. Inflation ticked up to 3.6% in December 2025 from November’s 3.5%, staying within the 1 percentage point tolerance band of the new 3% target. Economists expect the MPC to cut rates by 25 basis points on January 29 after 2025 inflation averaged 3.2%, below the central bank’s forecast of 3.3%, with price growth remaining subdued amid a stronger rand, record low inflation expectations and lower oil prices. South Africa’s central bank governor, Lesetja Kganyago told Bloomberg TV at Davos that inflation is on course to meet the SARB’s revised 3% target in 2026, earlier than planned for 2027. He also hinted that there was scope for two rate cuts this year. At the November meeting, Kganyago said officials were comfortable that “there was scope now to make the policy stance less restrictive in the context of an improved inflation outlook.
