Traders scaled back their bets for South Africa’s interest rate cuts this year, with markets now pricing in only one as they decipher the Federal Reserve’s preference to move slower on rates and US president-elect Donald Trump’s path on tariffs.

Forward-rate agreements, used to speculate on borrowing costs, are now pricing in just a single 25-basis-point rate cut in 2025, at the central bank’s January 30 monetary policy committee meeting.

Marek Drimal, a strategist at Societe Generale in London, said in a note to clients the central bank may even delay the cut until March due to less favourable market and external financial conditions.

His and the market’s view is contrary to what most economists expect for this year. They foresee two 25 basis point cuts this quarter to 7.25% and another by the third, bringing the bank’s total reductions since it started its easing cycle in September to 125 basis points.

Governor Lesetja Kganyago has repeatedly said the monetary policy committee would proceed with caution on rates as the outlook remains uncertain, even as its modelling signals further cuts on the horizon.

“We should not be creating uncertainty by making moves that we would later regret,” he said in an interview with CNBC Africa last month.

Since the MPC’s last meeting on November 21, the rand has weakened 4.5% against the dollar on concerns that the Fed would make fewer rate cuts than expected because of the strong US economy and Trump’s tariff threats.

The weaker rand has already led to higher gasoline prices and may impact the central bank’s 4% inflation forecast for this year. It prefers to anchor inflation expectations at the 4.5% midpoint of its target range.