JSE closes flat as Reserve Bank keeps rates unchanged
The Reserve Bank warns of global risks, but analysts reckon it will keep rates unchanged despite expected higher inflation
The JSE closed flat on Thursday after the South Africa Reserve Bank kept rates unchanged in a unanimous decision, but adopted a slightly more hawkish tone.The Bank now expects five increases of 25 basis points by the end of 2020, from a previous four, based on the Bank’s own modeling, although it emphasised that its quarterly projection model was only a broad policy guide.The Bank increased its forecast for inflation in 2019 and 2020, but downgraded average headline inflation for this year to 4.8% from 4.9%.The rand showed little reaction to the Bank’s decision, trading largely unchanged, at R13.47 to the dollar. The Bank now views the local currency as under-valued. It was at R12.37 at the time of the previous monetary policy committee (MPC) meeting, after the Bank said in March it was over-valued, at R11.66.The GDP growth forecast for 2018 was lowered to 1.2% from 1.7%.Reserve Bank governor Lesetja Kganyago said key uncertainties remained in the global environment. "The Bank asses...
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