The SARB’s cautious 25bp rate cut last month, despite subdued inflation, underscores its conservative approach to navigating current global uncertainties.
Governor Kganyago and Co. are evidently wary of price risks related to potential changes in global trade dynamics, as well as the impact of higher administered electricity prices and pension withdrawals under the two-pot retirement system.
ETM’s forecast is thus for two 25bp rate cuts through H1 2025. Given weak inflation, the first is likely to come in January. The SARB may then pause in March as it cautiously assesses the outcomes of the February budget proposal, before cutting again in May.
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