Cash, corporate liquidity and a more complex 2026 interest-rate environment

As I reflect on the first half of 2026, and my first few months as Head of Cash Solutions at Nedgroup Investments, one theme has stood out consistently in conversations with corporate treasurers and finance professionals: cash remains central to how businesses preserve resilience, manage uncertainty and position themselves for opportunity.

At the start of the year, the South African operating environment appeared to be improving. Inflation had moderated, business conditions were on a more constructive path, and many market participants expected interest rates to remain on a gradual downward trajectory. For corporate treasurers, that environment created room to review liquidity structures, reassess surplus cash allocations and consider how best to balance return, capital preservation and access to funds.

That outlook changed materially as geopolitical tensions in the Middle East escalated and the conflict involving the United States and Iran disrupted global oil supply routes. The resulting energy shock increased pressure on fuel prices and food-related input costs, contributing to a more difficult inflation outlook. In South Africa, the Monetary Policy Committee responded by raising the repo rate by 25 basis points to 7% on 28 May 2026, noting intensified inflation risks and the potential for second-round effects. The South African Reserve Bank also highlighted that April consumer inflation had risen to 4%, largely due to higher energy costs, with fuel prices recording one of the largest monthly jumps on record.

For corporates, the implication is clear: the environment has become more complex. The improvement in local operating conditions has not disappeared, but it now sits alongside renewed global uncertainty, higher input costs and the possibility that interest rates will remain higher for longer than initially expected. This makes the treasury function even more important.

In this environment, corporate clients continue to look for better rates on their cash. That is understandable. Cash sitting on balance sheets has an opportunity cost, particularly when businesses are managing working capital demands, capital expenditure plans and rising operating expenses. However, the conversations I have had with clients suggest that the search for yield remains disciplined. Treasurers are not chasing return at any cost. They are asking sharper questions about duration, counterparty exposure, liquidity terms, portfolio positioning and the reliability of execution.

This distinction matters. Corporate cash is held for different reasons. Some clients require immediate operational liquidity. Others hold cash pending acquisitions, dividends, debt settlements, capital projects or seasonal working capital cycles. For many, cash provides optionality. For others, it is a critical buffer in an uncertain environment. A sound cash strategy therefore cannot be based only on the highest available yield. It must reflect the purpose of the cash, the timing of potential outflows and the governance requirements of the organisation.

This is where liquidity remains non-negotiable. Higher yields are valuable, but they must be delivered in a way that preserves access to funds when clients need them. In corporate treasury, certainty is a form of value. The ability to transact efficiently, receive accurate reporting, access liquidity on time and engage with a responsive team becomes especially important during volatile periods. In my view, the quality of service around a cash solution is not separate from investment performance; it is part of the overall client outcome.

The first half of 2026 has also reinforced the importance of transparency and proactive engagement. Clients want to understand how portfolios are positioned, how managers are responding to changes in the interest-rate environment, and how risks are being managed. They also want timely market insight that helps inform internal decision-making. This is particularly relevant as treasurers assess whether to remain shorter-dated for flexibility, selectively participate in longer-dated opportunities, or monitor forward-rate expectations as part of their broader liquidity planning.

For Cash Solutions, this means our role extends beyond product delivery. It is about helping clients make informed decisions while ensuring that the fundamentals are never compromised: capital preservation, liquidity, disciplined risk management and consistent service. The ability to combine market insight with execution reliability is what builds trust, especially when the external environment changes quickly.

Looking ahead to the second half of 2026, corporate treasury teams are likely to remain focused on three priorities. First, preserving liquidity to meet operational and strategic needs. Second, extracting appropriate value from surplus cash in a higher-rate environment. Third, ensuring that service, reporting and transaction processes are efficient enough to support fast decision-making.

The key lesson from the first half of the year is that cash must work harder, but it must also remain true to its purpose. It must be secure, accessible and managed with discipline. For corporate treasurers and finance professionals, the opportunity is to treat cash not as a passive line item, but as an active balance-sheet tool that supports resilience and flexibility. For those of us entrusted to manage corporate cash, the responsibility is clear: deliver competitive outcomes while maintaining the liquidity, stability and trust that clients depend on.