The South African Reserve Bank (SARB) said on 10 June 2026 that the country's financial system was likely to remain resilient despite tighter financial conditions and monetary policy stemming from the Iran war. The assessment was published in its Financial Stability Review, a biannual review of the health of the financial system.
"Despite these risks, the South African financial system remains resilient overall," the central bank said.
OIL SHOCK AND RATE OUTLOOK
"The oil price shock is expected to continue to exert inflationary pressure, potentially prompting tighter monetary policy than before the conflict," the SARB said in the review. The central bank raised its policy rate by 25 basis points at its meeting on 28 May, and its quarterly projection model now suggests another increase in 2026. "Relief for interest rate-sensitive households is unlikely to materialise as expected at the beginning of the year," the review said.
RISKS FLAGGED
Other risks identified in the review included capital outflows amid heightened market uncertainty, unsustainable fiscal dynamics and increased financial distress among households. The SARB also pointed to fiscal vulnerability, citing higher borrowing costs, a weaker rand and large upcoming debt redemptions as key risks to South Africa's debt trajectory.
The review said advances in frontier artificial intelligence, notably Anthropic's Claude Mythos Preview, also posed financial stability risks. "Cyber risk has shifted from episodic and largely manageable events to continuous and compounding," it said.
The SARB said South Africa's foreign exchange reserves had grown to more than 16% of gross domestic product, the highest recorded level since the early 1960s, and that the country met all major reserve-adequacy metrics. On the same day, National Treasury said it had fully funded the government's foreign-currency borrowing requirement for the 2026/27 fiscal year with about $3.2 billion of concessional loans.