South African Central-Bank Model Suggests Rate on Hold

(Bloomberg) --

South Africa’s central bank has pared interest-rate expectations since the start of the year. While in January the policy path in the projection model used by the Reserve Bank showed the key interest rate at close to 7% by the end of 2021, that has come down to 6.5%, suggesting the Monetary Policy Committee may hold the rate on Thursday. Inflation that dropped to an almost nine-year low in October may even provide the central bank with a “small window of opportunity” to ease policy ahead of potential further negative credit-rating actions, according to Elize Kruger, an economist at NKC African Economics.

To contact the reporter on this story: Prinesha Naidoo in Johannesburg at pnaidoo7@bloomberg.net

To contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Jacqueline Mackenzie

©2019 Bloomberg L.P.