What are the two adverse inflation scenarios outlined by SARB Governor Kganyago related to the Iran conflict, and what would each imply for South African interest rates?

Kganyago outlined two adverse scenarios tied to the Iran conflict: first, a conflict lasting another two months with oil prices averaging around $100 per barrel, pushing inflation above 4%; second, a conflict lasting over a year with inflation exceeding 5%. Since the SARB’s inflation target is 3%, a rate increase would be warranted in both cases — one hike in the first scenario and several more in the second. Traders currently price in one quarter-point hike next month and another by year-end.

How did Kganyago characterize the current impact of the Iran war on oil prices and inflation, and what caution did he issue about physical oil supply constraints?

Kganyago stated that 'you are seeing the adverse scenario playing itself, although not fully' and added that the rise in oil prices validates the SARB’s prior wariness over inflation, noting 'I don’t think that we are far off with what we said would happen with the oil price.' He struck a hawkish tone by warning markets may be underestimating how long damage to refineries in the Persian Gulf could constrain physical oil supply — even if shipping through the Strait of Hormuz resumes.

South Africa’s Kganyago Says War Inflation Risks Are Playing Out

Apr 17, 2026

South African Reserve Bank Governor Lesetja Kganyago warned that rising oil prices from the Iran conflict validate inflation risks, potentially warranting interest rate hikes if crude averages $100 per barrel. Officials may lower growth forecasts while keeping fuel levy relief temporary.

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2026-04-17

South Africa’s Kganyago Says War Inflation Risks Are Playing Out

2026-06-02

South Africa's Kganyago Vows to Return Inflation to 3%

South Africa’s Kganyago Says War Inflation Risks Are Playing Out

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