Inflation: February’s headline CPI remained steady at 3.2% y/y, defying expectations of a slight increase. Core CPI, excluding food and energy, eased to 3.4% y/y from 3.5% y/y. While inflation will likely remain relatively subdued in the coming months, there are risks. US trade tariffs, the passing of an unfavourable budget and risks to the GNU will push inflation higher through a likely weaker ZAR.
Repo rate: The SARB kept the repo rate at 7.50% in March after three consecutive 25bp cuts. The bank took a cautious approach despite inflation being within the target range with domestic and global uncertainties influencing the decision. While much will depend on the extent of US Fed rate cuts, we expect only one more rate cut this year.
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