The South African Reserve Bank’s (SARB’s) smaller-than-expected 25bp interest rate hike today and large cuts to its growth forecast make clear that its focus is pivoting to concerns about activity rather than inflation. The next meeting will be a close call between a hold and one more 25bp hike. On balance, we suspect that the data available by that point won’t quite yet give the SARB confidence that inflation pressures are easing sufficiently to bring the tightening cycle to a halt.
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