May 31, 2024 10:17 GMT
MNI SARB Review - May 2024: Broadly Balanced Inflation Risks
The SARB kept rates on hold but changed its assessment of inflation risks and said that inflation is now expected to reach target mid-point by 2Q2025.
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Executive Summary:
- The SARB left interest rates unchanged, as expected.
- Inflation risk assessment changed from “upside” to “balanced.”
- The central bank sees faster return to target mid-point.
Full review including summary of sell-side views here:
The South African Reserve Bank (SARB) left interest rates unchanged in a unanimous vote but struck some optimistic notes on the inflation outlook. The central bank expects inflation to return to the target mid-point of +4.5% Y/Y somewhat faster and changed its assessment of risks to the inflation outlook to “broadly balanced,” dropping a well-established view that they were tilted to the upside. On the other hand, the SARB flagged concern about elevated inflation expectations, pointing to the need to deliver on the target “sooner rather than later.”
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