Rising oil prices and renewed conflict in the Middle East have complicated the South African Reserve Bank's interest rate decision this week, with investment experts warning that inflation risks remain elevated.
A fresh surge in global oil prices following escalating conflict in the Middle East has added another layer of uncertainty ahead of the South African Reserve Bank's (Sarb) Monetary Policy Committee (MPC) meeting this week, with investment managers warning that the central bank faces one of its most finely balanced interest rate decisions in months.
Brent crude climbed above $90 a barrel after renewed hostilities between the United States and Iran intensified over the weekend, reigniting concerns about inflation, financial markets and the outlook for interest rates globally.
The Reserve Bank will announce its latest interest rate decision on Thursday, one day after South Africa releases June inflation data.
Mike van der Westhuizen, portfolio manager at CAM Asset Management, said the central bank's decision remained too close to call, although markets appeared to be leaning towards another increase in borrowing costs or, at the very least, a more hawkish policy stance.
