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South Africa: Adding another hike for 2021

BNP Paribas South Africa has released the following economic commentary by Jeff Schultz, Senior Economist, BNP Paribas South Africa.


  • We have added another 25bp hike to South Africa’s 2021 policy rate profile.

  • We expect the South African Reserve Bank (SARB) to tee up a gradual normalisation cycle at its July MPC meeting, hiking in both September and November and taking the end-2021 repo rate to 4.00%.

  • Stickier non-core prices in H2, a possible lowering of the inflation target in 2022 and our view that the central bank’s output gap assumptions should gradually narrow, underpins our forecast tweak.

  • With CPI set to slow below the SARB’s current implicit 4.5% target midpoint from Q2 2022, we see the policy rate ending 2022 at 4.75%, still below the pre-pandemic level.

Download the full research note below...

Download PDF • 1.33MB


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