21 Jul 2015
SARB could hike rates on Thursday – TDS
FXStreet (Edinburgh) - Strategist at TD Securities Paul Fage expects the South African Reserve Bank to hike its benchmark rate by 25 bp.
Key Quotes
“We think the SARB rate decision on Thursday, 23 July, is a very close call, but on balance we think the SARB will hike its key policy rate, the repo rate, by 25bps. The consensus is also for the SARB to hike by 25 bps, but 13/30 of the economists surveyed expect no change”.
“Growth remains anaemic, but the SARB has often stated that the ability of monetary policy to stimulate the economy is limited given supply constraints”.
“At the May meeting the MPC adopted a clearly hawkish stance, with two of the six members voting for a hike. We think that the SARB will want to maintain its credibility and try to anchor longer-term inflation expectations at a lower level by hiking sooner rather than later”.
“If the SARB does not hike on Thursday then we think that it is almost certain that they will hike in September, possibly in the wake of a Fed hike”.
Key Quotes
“We think the SARB rate decision on Thursday, 23 July, is a very close call, but on balance we think the SARB will hike its key policy rate, the repo rate, by 25bps. The consensus is also for the SARB to hike by 25 bps, but 13/30 of the economists surveyed expect no change”.
“Growth remains anaemic, but the SARB has often stated that the ability of monetary policy to stimulate the economy is limited given supply constraints”.
“At the May meeting the MPC adopted a clearly hawkish stance, with two of the six members voting for a hike. We think that the SARB will want to maintain its credibility and try to anchor longer-term inflation expectations at a lower level by hiking sooner rather than later”.
“If the SARB does not hike on Thursday then we think that it is almost certain that they will hike in September, possibly in the wake of a Fed hike”.