-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Global Macro Weekly -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI SARB Preview - March 2023: CPI Data Cements Case For Hike
Executive Summary
- The South African Reserve Bank will likely extend the tightening cycle and raise the key interest rate by 25bp.
- Latest GDP data pointed to weak growth dynamics, while CPI figures topped expectations, presenting a policy dilemma for the SARB.
- SARB communications have signalled that the central bank prioritises anchoring inflation near the +4.5% Y/Y mid-point of the target band over supporting economic growth,
MNI SARB Preview - March 2023.pdf
Figure 1. South African CPI vs. Core CPI. The shaded region represents the SARB’s target band. The red line represents the mid-point of the official target band.
The latest inflation data arguably cemented the case for another rate hike from the SARB this week. Headline CPI unexpectedly accelerated to +7.0% Y/Y in February, while core CPI quickened more than forecast to +5.2% Y/Y, with both metrics staying above the mid-point of the SARB’s tolerance band. The data came on the heels of a survey conducted by the Bureau for Economic Research which showed that inflation expectations for the year ahead increased to +6.3% Y/Y from +6.1% previously. Although monetary tightening delivered to date affects the economy with a lag, the SARB is under pressure to maintain its hawkish posture in order to guide inflation towards the mid-point of its formal tolerance band.
We think that the SARB has demonstrated a bias towards fulfilling its inflation mandate vis-à-vis supporting GDP growth and is likely to deliver a 25bp rate hike, despite the obvious headwinds for the South African economy. First, already in its January statement, the SARB noted that Eskom’s load-shedding is believed to be fuelling inflation in addition to weighing on economic growth. Faced with the stagflationary implications of power outages, the SARB will likely choose to focus on keeping prices under control, while leaving it to the government to address the structural problems haunting the beleaguered utility. Second, recent central bank communications indicate that SARB officials are cognisant of the growth/inflation dilemma but are willing to prioritise pursuing the central bank’s inflation mandate over supporting economic growth
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.