Playing chicken with interest rates
The egg price snafu isn’t great for inflation, but a successful medium-term budget should reduce pressure on the Reserve Bank
Under normal circumstances, the Reserve Bank would probably be done hiking the repo rate, having raised rates by an outsized 475 basis points (bp) to 8.25% over the past 18 months, into restrictive territory. Unfortunately, these are not normal times.
Globally, inflation has eased over the course of the year, but hopes for a further slowdown are being quashed by the fact that food price inflation remains stubbornly high, oil markets have tightened significantly and core inflation is proving persistent. ..
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