As expected, South Africa central bank kept rates unchanged at +6.75%.
The decision to keep policy steady was unanimous.
The MPC considers monetary policy to be moderately accommodative
Overall risks to inflation remain tilted to the upside
Economic challenges are structural, with access risks to be to the downside
Policymakers cut its inflation forecasts, adding that inflation expectations have reduced since the previous monetary policy meeting
SARB’s model shows implied rate path is for one +25 bps hike to +7.00% by end 2021 – prior the central bank model saw four-rate hikes of +25 bps by end 2020
SARB does not automatically follow the Quarterly Projection Model (QPM), which is viewed as an ‘extra’ member of the MPC
USD/ZAR – The South African rand has fallen after the rate announcement. Prior to the release, many were expecting SARB to sound more ‘hawkish’ before the rate decision given the inflation increase in November. USD/ZAR has rallied to around $13.80, from $13.75 before the decision.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments.
He has a deep understanding of market fundamentals and the impact of global events on capital markets.
He is respected among professional traders for his skilled analysis and career history as global head
of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean
has played an instrumental role in driving awareness of the forex market as an emerging asset class
for retail investors, as well as providing expert counsel to a number of internal teams on how to best
serve clients and industry stakeholders.