South African inflation decelerated for the first time since January, a slowdown that’s unlikely to sway the central bank from delivering an unprecedented second consecutive 75 basis-point hike in interest rates. More monetary policy tightening remains in the cards because the central bank wants to keep inflation expectations anchored and alleviate pressure on the rand. Forward-rate agreements, used to speculate on borrowing costs, show traders are pricing in 68 basis points of tightening this week. Rate projectionAt the last meeting in July, the implied policy rate path of the central bank’s quarterly projection model, which the MPC uses as a guide, indicated the benchmark will be at 5.61% by year-end. Rate setters have already raised the key rate by a cumulative 200 basis points since November.

Source: News 24 September 22, 2022 00:58 UTC