Daily Market Update: 23 April 2026 – SARB Holds Rates But Warns of Potential Hikes Ahead
The South African Reserve Bank dominated market attention on Wednesday with its April Monetary Policy Review, which delivered a hold on the repo rate at 6.75% but included a notably hawkish shift in forward guidance. Governor Lesetja Kganyago signalled that the central bank is prepared to hike rates if the Middle East oil shock feeds through into sustained inflation — a stark reversal from the two cuts markets had expected at the start of the year.
🏦 SARB Review: Key Takeaways
The Monetary Policy Committee (MPC) voted unanimously to keep the repo rate at 6.75% (prime lending rate 10.25%). However, the accompanying statement shifted the tone significantly:
- Inflation revised down: The SARB lowered its 2026 inflation forecast to 3.3% from 3.5%, reflecting the benign base case
- Upside risks emphasised: The oil shock from the Middle East conflict was flagged as the primary risk, with the SARB modelling scenarios where inflation could accelerate materially
- Potential hikes on the table: Markets are now pricing in two potential 25 basis-point hikes this year — a dramatic reversal
- Worst-case scenario: The SARB’s stress tests model rates potentially returning to 8% if oil prices remain elevated
- 3% target commitment: Governor Kganyago reaffirmed the SARB’s commitment to the new 3% inflation target, expected to be achieved by 2028
🥇 Gold (XAU/USD): Reversing Course on Hawkish Signals
Gold reversed its recent decline, climbing to approximately $4,698 per ounce, up 0.7% on the session. The SARB’s hawkish tone, combined with similar signals from other emerging market central banks, reinforced the view that the global monetary policy environment is becoming less accommodative — a backdrop that has historically supported gold.
The metal also found support from reports that the US-Iran peace talks have stalled, with Tehran demanding the lifting of additional sanctions as a precondition for further negotiations.
📊 JSE: Mixed Reaction to SARB
The FTSE/JSE All Share Index (ALSI) fell to approximately 116,200 points, down 0.6% as rate-sensitive sectors sold off on the hawkish guidance. The Top 40 Index dropped to around 107,800.
Banks were notably weaker, falling approximately 1.5% on the prospect of higher rates dampening credit growth. Listed property stocks also declined, with the SA REIT Index shedding 2.1%.
On the positive side, gold miners rallied as the gold price recovered, and exporters benefited from the slightly weaker rand.
💰 Rand (USD/ZAR): Weakening on Stalled Talks
The rand gave back its gains, weakening to approximately R16.58 per US dollar. The currency was caught between opposing forces — the SARB’s hawkish stance (rand-positive) versus the stalled peace talks and rising oil prices (rand-negative). The net effect was a modest weakening as geopolitical concerns outweighed monetary policy support.
🔍 Looking Ahead
Markets will now focus on the US FOMC meeting scheduled for 28-29 April, where the Federal Reserve is widely expected to hold rates at 3.75%. The tone of the Fed’s statement will be critical for global market direction. Meanwhile, US-Iran developments remain the wild card that could override all other factors at short notice.
This article is provided for informational purposes only and does not constitute financial, tax, or investment advice. Old Mutual Secunda is an authorised Financial Services Provider. Past performance is not indicative of future results. Always consult a qualified financial adviser before making investment decisions. Old Mutual is a Licensed Financial Services Provider (FSP 604).
