South Africa entering a perfect storm

It’s been a week to forget for South Africa, in which fears emerged that the improvement in the public finances is stalling and concerns about (even more) intense loadshedding surfaced. That was topped off by allegations that South Africa supplied weapons to Russia, which threaten to cause ties with the West to fray. The rand has come under pressure which, at the margin, makes it more likely that the Reserve Bank will hike interest rates further than we expect.