South Africa holds interest rates despite inflation

South Africa’s central bank maintained its benchmark interest rate, contrary to market expectations of a hike following a surge in June inflation. The decision caused the rand to drop over 2%, becoming the worst-performing currency, while bond yields rose. Governor Lesetja Kganyago noted persistent high inflation and weak growth, and economists like Citibank’s Gina Schoeman predict a potential rate hike in September due to ongoing inflation concerns linked to energy costs from the Middle East conflict.