Morgan Stanley Says South Africa to Stay on Prolonged Rate Hold

Surging oil prices triggered by the Middle East conflict is likely to push South African inflation higher and see policymakers keep interest rates unchanged for months, according to Morgan Stanley.

“The implication is a materially longer hold rather than an immediate tightening response,” Morgan Stanley economist Andrea Masia wrote in a research note. He sees the central bank staying on hold through most of 2026 and resuming its easing cycle in November, “followed by two 25 basis point cuts in 2027, taking the terminal repo rate to 6%.”