SARB cuts and unofficially adopts lower inflation target

The South African Reserve Bank’s decision to continue with its interest easing cycle today, with a 25bp cut to 7.00% was unsurprising, and the highlight of the meeting was Governor Kganyago’s announcement that the SARB will informally target the bottom of its 3-6% inflation target range going forward. This reinforces our view that the repo rate will be lowered further to a below-consensus 5.75% by end-2026.

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