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MNI SARB Review - November 2022: Hike Pace to Slow in New Year

Executive Summary:

  • SARB raised rates by 75bps, alongside expectations
  • Vote split erred to the dovish side, 3-2 for 75bps vs 50bps, contrasting with Sept's 3-2 for 75bps vs 100bps
  • Presser suggested pace of future hikes will slow as rates climb north of neutral

Full review including summary of sell-side views here: https://emedia.marketnews.com/marketnewsintl/MNISA...

The Bank tightened policy further in November, putting the benchmark rate at 7.00% and meeting their assumption of the neutral rate. The decision means the prime mortgage rate is now over 10% for the first time since 2019. This blunt and direct psychological level should filter swiftly into consumer spending patterns ahead of year-end, and could slow the pace of hikes going forward.

The vote split among the board was consistent with the argument that rate hikes will slow going forward, with 3 members opting for a 75bps move, while 2 voted for a 50bps increase. This contrasts with the September decision, at which the board were again split 3-2, but 2 members voted for 100bps. Should this pattern extend, the next decision in Q1 2023 could slow to a 50bps move, or even 25bps.

MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
HomepageCEMEA Bank - ReviewSouth African Reserve - ReviewEM Central Bank ReportsEM Central Bank ReviewEmerging Market News

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