The rand’s rally and moderating inflation provided a strong case for the Reserve Bank to begin an interest rate-cutting cycle, but February’s budget would be a key deciding factor, economists said on Wednesday. The consumer price index rose 4.7% in December 2017, according to Statistics SA data released on Wednesday. Core inflation, which excludes the prices of food, non-alcoholic beverages, energy and petrol, slowed to record its lowest rate since 2011. Stanlib chief economist Kevin Lings said a confidence-boosting national budget would help avoid further sovereign credit rating downgrades and could open the door for the Bank to cut interest rates. "The lingering prospect of a credit ratings downgrade to subinvestment grade by Moody’s continues to weigh on the longer-term outlook for the rand," he said. The currency’s performance is one of the major factors the Bank considers when making interest rate decisions. Also, Finance Minister Malusi Gigaba remains with the difficult task o...
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