The South African Reserve Bank kept the policy repurchase rate unchanged at 8.25% at the March monetary policy committee (MPC) meeting and kept its forecasts largely unchanged. However, there was hawkishness embedded in the language and its quarterly projection model (QPM) implied rate path.

The two hawkish aspects were about the upside risks to food price inflation due to El Nino and the supply cost push pressures from inefficient logistics. These, in addition to cosmetic changes in forecasts, showed up in the QPM implied repo rate path showing 50bp reduction in 2024 compared to 75bp reduction implied at the January MPC...

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