South Africa: SARB to keep rates unchanged – TDS

Sandeep Kanihama FXStreet Contributor

Analysts at TD Securities are expecting the SARB to keep rates unchanged at 6.50%.

Key Quotes

“It is a very close call, but on the balance we believe that hold is more likely on the basis of macro financial stability risks related to a possible downgrade to junk by Moody's. However, consistently low inflation is supportive of a cut.”

“The last inflation print came out at 3.6% y/y in November, which is quite significantly below the 4.5% mid-point of the inflation target (3-6%). If the SARB holds, USDZAR is likely to move slightly lower 0.2%. If the SARB cuts, we expect ZAR weakness, with USDZAR moving 0.4% higher.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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