The SA Daily
24 May 2018
SARB will likely hold steady
- The SARB will meet today; we foresee rates held steady.
- We believe that rates are now at, or close to, the trough in the current cycle – and the SARB is therefore unlikely to cut because the MPC is committed to anchoring inflation expectations at the mid-point of the target range. Further, the inflationary risks from a weaker exchange rate and higher oil prices, amid higher SA economic growth expectations, support rates being held steady.
- Between the SARB’s last meeting and now, the market had expected a 25 bps cut for today, with a 24% probability, and this expectation peaked to 44% last month. However, given the recent market volatility, the market no longer foresees a change in rates today, as don’t we.
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