South Africa: Heads we hike, tails we hold

With inflation likely to breach the SARB’s upper 6% inflation target band this week, the bankfaces another tough call on whether to hike the policy rate on Thursday.

    A decline in most macro indicators, a ‘stronger’ ZAR since the March MPC meeting andinflation that looks to be behaving as expected suggest the bank will hold steady this week.

    The decision to leave rates unchanged is likely to be a close-run thing, however, so a 25bphike cannot be fully ruled out.