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South Africa Consumer Prices (May)

The larger-than-expected decline in South Africa’s headline inflation rate, to 6.3% y/y, reinforces our view that the tightening cycle is over and that interest rates will be kept at 8.25% at next month’s MPC meeting. But with concerns about the impact of loadshedding on price pressures still lingering, a turn to monetary loosening is unlikely to materialise until early next year.

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