Traders see South Africa cutting interest rates once in 2025

Traders scaled back their bets for South Africa’s interest rate cuts this year, with markets now pricing in only one as they decipher the Federal Reserve’s preference to move slower on rates and US president-elect Donald Trump’s path on tariffs.

Forward-rate agreements, used to speculate on borrowing costs, are now pricing in just a single 25-basis-point rate cut in 2025, at the central bank’s January 30 monetary policy committee meeting.

Marek Drimal, a strategist at Societe Generale in London, said in a note to clients the central bank may even delay the cut until March due to less favourable market and external financial conditions.

His and the market’s view is contrary to what most economists expect for this year. They foresee two 25 basis point cuts this quarter to 7.25% and another by the third, bringing the bank’s total reductions since it started its easing cycle in September to 125