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ZAR Gains Following Hawkish SARB MPC Split (3-2 in Favour of +25bp vs +50bp Hike)

SOUTH AFRICA

SARB Statement Analysis

  • USD/ZAR falling after the decision, most notable development was the MPC split.
  • very narrow split (3-2 In favour of +25bp vs +50bp) in the MPC is an interesting development and notably hawkish with most analysts expecting a unanimous +25bp decision
  • Inflation revisions were slightly more moderate than many forecast
  • Growth revision higher was also not expected, given Ukraine and load-shedding risks
  • Kganyago focused on second round effects and expectations in the questioning - also highlighting uncertainty from the Ukraine crisis
  • From the statement:
    • Average surveyed expectations of future inflation have increased to 5.1% for 2022 vs 4.8% prior
    • Market-based surveyed expectations for inflation have also increased to 5.5%
    • Long-term inflation expectations derived from the break-even rates in the bond market have also increased
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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