Policymakers at the South African Reserve Bank are keen to emphasise that their work to tame the “inflation monster” is not over, leaving open the possibility of additional monetary tightening. The two most likely triggers would be, first, if loadshedding has a stronger inflationary impact than it has done so far and, second, a looser fiscal stance ahead of elections. But as things stand, we think it’s most likely that the tightening cycle has ended. If anything, rates could be lowered more quickly than most expect.
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