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MNI SARB Review March 2022: Hawkish MPC Split Surprises Markets

south africa
south africa

Executive Summary

  • As expected, the SARB raised rates +25bps to 4.25%, in line with the Bloomberg consensus and implied market pricing.
  • Markets were surprised by a hawkish 3-2 MPC split in favour of a +25bp hike vs +50bp – signalling a greater degree of concern over the path of inflation.
  • SARB delivered mixed dovish/hawkish forecast revisions with average FY22 CPI revised to 5.8% y/y vs 4.9% y/y prior & growth lifted to 2.0% vs 1.7% prior. 2Q Inflation is also set to breach the 3-6% target range at 6.2% y/y vs 5% expected prior.
  • Uncertainty over fuel prices linked to the Ukraine crisis and the possibility of accelerated Fed tightening in +50bp clips present risks to larger SARB hikes in May, although this remains data-dependent.

Full Review Here:

SARB Review 25.03.22.pdf

MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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