SARB to cut, oil prices slump

The current make-up of South Africa's MPC means that next week's rate decision will be a close call, but we expect the Reserve Bank to embark on an easing cycle. How quickly rates come down partly depends on whether the inflation target is lowered. Meanwhile, most African economies will welcome the recent slump in oil prices. But for the region’s major oil producers, Nigeria and Angola, it simply adds to their economic challenges. Currencies have already started to weaken, which will keep inflation high and mean that interest rate cuts are still some time away.