Although headline inflation in South Africa rose, to 3.6% y/y, last month, the decline in core inflation, to 3.1% y/y, is likely to give policymakers at the Reserve Bank confidence that they can meet their new inflation target (of 3%). A 25bp cut (to 6.75%) at the MPC meeting tomorrow looks all but certain and we remain of the view that there will be an additional 100bp of rate cuts over the course of 2026.
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