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SOUTH AFRICA: SARB Cuts Rates By 25bp, Starting Its Easing Cycle

SOUTH AFRICA
EM BulletBulletGlobalEmerging Market NewsRegion
  • The South African Reserve Bank (SARB) kicked off its easing cycle with an expected 25bp cut to the repo rate, refusing to mimic the Fed's 50bp cut from the day before. The decision came on the back of below-forecast inflation outturn released Wednesday. Governor Lesetja Kganyago said that the MPC discussed an unchanged stance, a 25bp cut, and a 50bp cut, but eventually reached consensus to reduce the repo rate by a quarter of a percentage point.
  • Electricity and Energy Minister Kgosientsho Ramokgopa vowed that the government will protect South African's from higher electricity costs after the National Energy Regulator of South Africa (NERSA) approved Eskom's request to recoup ZAR8bn for the financial year and rumours have been doing the rounds that the utility might ask for a 46% electricity tariff hike.
  • The National Treasury holds an auction for inflation-linked bonds today. South Africa's 5-year and 10-year breakeven inflation rates continue to sit close to multi-year lows, at 4.35% and 5.25% respectively.
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  • The South African Reserve Bank (SARB) kicked off its easing cycle with an expected 25bp cut to the repo rate, refusing to mimic the Fed's 50bp cut from the day before. The decision came on the back of below-forecast inflation outturn released Wednesday. Governor Lesetja Kganyago said that the MPC discussed an unchanged stance, a 25bp cut, and a 50bp cut, but eventually reached consensus to reduce the repo rate by a quarter of a percentage point.
  • Electricity and Energy Minister Kgosientsho Ramokgopa vowed that the government will protect South African's from higher electricity costs after the National Energy Regulator of South Africa (NERSA) approved Eskom's request to recoup ZAR8bn for the financial year and rumours have been doing the rounds that the utility might ask for a 46% electricity tariff hike.
  • The National Treasury holds an auction for inflation-linked bonds today. South Africa's 5-year and 10-year breakeven inflation rates continue to sit close to multi-year lows, at 4.35% and 5.25% respectively.