The South African Reserve Bank plans to revise its economic risk scenarios ahead of its next monetary policy decision as escalating conflict involving Iran pushes global oil prices higher, Governor Lesetja Kganyago told Reuters.
The central bank is scheduled to review interest rates on March 26, after leaving its benchmark lending rate unchanged at 6.75 percent in January while policymakers waited for clearer evidence that inflation expectations were easing.
Kganyago said the bank’s earlier framework included baseline, optimistic, and adverse scenarios, but the recent surge in crude prices linked to Middle East tensions has rendered the previous assumptions outdated. The adverse scenario had assumed oil would average about $75 per barrel in 2026 and that the South African rand could weaken to roughly 18.50 per U.S. dollar, according to MarketScreener.
Rising oil prices and currency volatility are key concerns for policymakers because they can quickly feed into domestic inflation. Kganyago added that the central bank will need to determine whether the current shock is temporary or persistent before adjusting policy, highlighting the growing impact of geopolitical tensions on emerging-market monetary policy.
