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SARB’s hawks return to driver seat

The South African Reserve Bank (SARB) delivered a more-aggressive-than-expected 50bp interest rate hike, to 7.75%, today as hawks returned to the majority with a bang. But while the probability of another hike in May has increased, we think that easing inflation will allow policymakers to take their foot off the brakes by then, and even turn to rate cuts by the end of the year.

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