Economy

Higher for longer, but no more hikes

Lesetja Kganyago, Governor of the SA Reserve Bank (SARB), was exceptionally dovish at today’s Monetary Policy Committee (MPC) meeting, especially relative to his usual stance and relative to October’s CPI which came in at 5.9% year-on-year (y/y) relative to expectations of 5.6%.

PPS Investments: MPC – 23 November 2023

The Monetary Policy Committee (MPC) unanimously decided to leave the repo rate unchanged at 8.25%. Governor Kganyago highlighted the recent increase in local inflation and that near-term pressure on inflation is to the upside but believes that the current level of the repo rate is restrictive.

PPS Investments: CPI for October 2023

As expected, Consumer price inflation accelerated further in October, to 5.9% year-on-year, compared to 5.4% in September. Inflation has steadily crept higher after the July trough of 4.7% and is now uncomfortably close to the upper limit of the SARB’s target range.

The SARB MPC is expected to keep the repo rate unchanged this week