South Africa’s Inflation Holds Steady as Central Bank Decision Looms

The government’s statistics regulator showed that South African inflation stayed at 3.2% during February and rose below the projected 3.3%. One day before the interest rate change South Africa’s central bank faces a key decision over inflation rates.

The SARB’s decision will take external influences into account despite inflation presently being below its 4.5% target. The willingness of Donald Trump to raise tariffs poses threats to the economy, my along with the budgetary stalemate within South Africa’s ruling alliance. The upcoming 7.50% interest rate holds wide support among economists yet some specialists expect another rate reduction after inflation came in under projections.

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Based on his data David Ojomolo from Capital Economics predicts a severe choice will come next. Speaking for IG analyst Shaun Murison believes the South African Reserve Bank will leave its interest rates unchanged because there are no changes expected for U.S. Federal Reserve rates. Murison predicts that when South Africa lowers interest rates it faces tougher inflation challenges and loses its edge in funding foreign money.