SARB hawkishly cuts by 25bp

The South African Reserve Bank decision to cut its repo rate by 25bp, to 7.50%, was widely expected but Governor Kganyago was more hawkish than anticipated, citing concern about US tariff threats and the prospects of the rand weakening further. On the back of that, we are nudging up our rate forecast, although we are sticking with our view interest rates will fall a bit further than the consensus expects. We now forecast the repo rate will end this year at 6.75% (previously 6.25%).