South Africa’s central bank will continue tightening monetary policy aggressively amid a deteriorating inflation outlook, currency weakness and pressure to keep pace with an increasingly hawkish US Fed. | Fin24
While the Monetary Policy Committee prefers to anchor inflation expectations close to 4.5%, heightened risks to economic growth - including flood damage in the province that’s the second-biggest contributor to gross domestic product and deeper, more frequent rolling blackouts - will also influence decision-making.
Different data points that support cases for dovish and hawkish stances mean"there’ll likely be a diversity of views on the MPC and therefore there’s room for surprises," said Peter Worthington, a senior economist at Absa Bank. It may also mark the fifth straight meeting with split votes among the five-member panel.
Of 20 economists in a Bloomberg survey, 13 including Worthington predict a second consecutive half-point increase, with the rest expecting a bigger 75 basis-point hike. Investors have fully priced in a half-percentage point move, but see a chance of a bigger increase.In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy.
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