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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.
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Free AccessMNI SARB Preview - September 2021: SARB to Hold at 3.5%, Inflation Vectors Still Contained
EXECUTIVE SUMMARY
- SARB to keep policy on Hold at 3.5% (unanimous decision), Focus will be on GDP rebasing assessment and discussion of narrower 3-4% inflation targeting framework
- Policy to remain accommodative to 1Q22 and potentially beyond with inflation vectors still contained on a near and medium-term basis: 2022 avg inflation was revised lower to 4.2% vs 4.4% at the prior meeting - in line with the midpoint of the range
- Fragile recovery narrative and acutely high unemployment will likely keep the SARB from reactively hiking policy rates in the near-term and hampering the recovery
- Immediate instatement of the narrower inflation target would be construed as a hawkish development by markets, but we do not see Kganyago delivering the change at this meeting
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The SARB is expected to keep its key rate unchanged at 3.50% this week, with inflation still broadly contained within the 3-6% target range on both a near and medium-term basis. This, alongside a muted aggregate demand impulse, structurally high unemployment and a fragile recovery narrative, informs our base case for the SARB to remain on hold out to 1Q22 and potentially beyond.
To read the full story
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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.