“Hopes for an interest rate cut this year in South Africa — not to mention in the US and other major economies — have steadily dimmed as 2024 has advanced.
In its latest Monetary Policy Review (MPR), the SA Reserve Bank has poured another bucket of cold water — with plenty of ice — over such prospects, pointedly noting that the markets are no longer pricing in a rate cut for 2024.
“Amid setbacks in recent domestic inflation outcomes, along with heightened uncertainty about global disinflation owing to stickiness in services inflation, markets now expect South Africa’s policy rate to remain unchanged this year,” the MPR says.
The MPR says that the Reserve Bank forecasts headline inflation to only “ease to the midpoint of the 3-6% target band by the fourth quarter of next year”.
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The extracts above are courtesy of The Daily Maverick.
