South Africa: Rand Hovers Around 1-Week High.

The South African rand traded around 16.4 per US, hovering near the highest since mid-May, as traders positioned for a potential rate increase at the next SARB's meeting scheduled on May 28. Headline Inflation surged to 4% in April, up from 3.1% in March, due to higher energy and transportation prices linked to disruptions in the Middle East. Core inflation also quickened to 3.6% from 3.2%, signaling broader price pressures. Most economists expect the South African Reserve Bank to hike the key rate by 25 bps to 7.0% to reduce the likelihood of second-round effects and safeguard the 3% target. However, the decision remains a close call, as the central bank may opt to keep rates unchanged to assess incoming inflation data and developments in the Iran conflict.