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SARB pauses for breath

Following its surprise hike in January, the recent rally in the rand enabled the South African Reserve Bank (SARB) to keep interest rates on hold today. But the bigger picture is that, with South Africa still among the most vulnerable EMs to a slowdown in capital inflows and with inflation set to rise above the SARB’s target range in the near term, interest rates are likely to rise further over the coming months.

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