MNI SARB Preview - Nov 2024: Lower CPI Leaves Room For Cut
Executive Summary:
- Headline inflation stays comfortably below the +4.5% Y/Y target mid-point.
- The previous SARB forecast saw inflation staying sub-4% until 2H2025.
- Conservative approach and concerns about ZAR should keep size of cut limited.
Full preview including summary of sell-side views here: MNI SARB Preview - November 2024.pdf
The consensus view is that the South African Reserve Bank (SARB) will deliver another 25bp cut to its key rate this week, taking advantage of a more benign inflation environment. Headline inflation may touch the lower end of the +3%-6% Y/Y target range and is expected to stay below +4% Y/Y until 2H2025. On the other hand, uncertainty around the further consequences of the election of Donald Trump to a second term as US President will likely keep the rate-setting panel cautious. Against this backdrop, the SARB can be expected to keep the size of the widely anticipated cut contained to the standard 25bp and deploy cautious rhetoric.