THE SOUTH AFRICAN TREASURER: NEXT GENERATION TREASURY

TMI | THE SOUTHAFRICANTREASURER 33 NEXT GENERATIONTREASURY We acknowledge that both the risk and hedging solutions are different inmost instances and, as such, aim to unpack and discuss the broader market conditions and possible solutions to limit interest rate risk or take advantage of the rapidly changing market conditions. A significant pain point for many corporates is rapidly rising interest rates, raising the question of whether they should be fixing rates at these levels or whether the opportunity has passed given howmuh rate hike risk is priced into themarket. By Kieran Siney and LloydMiller, Co-Heads, ETMAnalytics (Pty) Ltd The accompanying chart shows that even though the SARB has front-loaded its hiking cycle andmonetary conditions have tightened interest rates are still accomodative. The current inflation rate puts the real interest rate, when calculated as the current policy rate less CPI, at Dealingwith Interest RateRisk

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