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Global Markets daily

18 January 2018

Too early to change

Seventeen of 20 analysts polled by Reuters think the SARB will keep rates on hold today rather than cut. We are in this camp. While rand and political risks have dissipated since the last meeting and the electricity price increase came in well-below expectations, other risks that the MPC explicitly warned about remain: the budget, the probable rating downgrade and WGBI related outflows, free higher education, the higher oil price, wage demands and Fed tightening. What’s more, at the last meeting of 2017, the SARB’s econometrics model was predicting three hikes — and to go from there to a cut in a matter...

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