South Africa’s 10-year government bond yield rose toward 8.74%, moving above the one-week low of 8.69% recorded on September 4, as the escalating US-Iran conflict continued to push oil and energy prices. The increase in energy costs is fueling concerns that inflation could pick up again, complicating the outlook for monetary policy. If price pressures remain elevated, central banks may have to keep rates higher for longer. Meanwhile, South African Reserve Bank Governor Lesetja Kganyago played down the need for an immediate policy response to inflationary shocks from higher oil prices and potential drought conditions. Kganyago nevertheless reiterated his determination to bring inflation back to the SARB’s 3% target. The central bank held its benchmark rate at 7% in July, citing growth risks and a softer inflation outlook. Price growth cooled down to 4.3% in July from 5% the prior month, though recent fuel price adjustments in August and September could push inflation higher.