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Mail & Guardian writes that Statistics SA is expected to deliver another softer consumer inflation reading this week, but that will probably not be enough to temper the SA Reserve Bank’s (SARB’s) hawkishness.
Analysts have forecast a slightly lower inflation number for October, with consensus expecting it to hit 7.4% year-on-year – down from 7.5%. If they are right, it will mark the third consecutive retreat and back up the view that inflation peaked in July. But even though domestic inflation has seemingly peaked, analysts do not expect the SARB to change tack after having implemented six consecutive repo rate hikes since last November. The repo rate, which affects the cost of borrowing, is now only 25 basis points below its pre-pandemic level of 6.5%. And, with consensus forecasting another 75 basis point hike at this week’s monetary policy committee (MPC) meeting, the repo rate is set to come in at 7%. Some, including Investec’s economists, are expecting an even more aggressive 100 basis point repo rate hike this week. The rand has had a very weak run in the past three months, which will inevitably factor into the MPC’s decision-making this week.
- Read the full original of the report in the above regard by Sarah Smit at Mail & Guardian (subscriber access only)
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