South Africa: More SARB easing to come – Standard Chartered

Economists at Standard Chartered Bank see South African Reserve Bank (SARB) cuts in May and July 2020, with tightening in 2021. USD/ZAR is sitting at 18.4694.

Key quotes

“We forecast a SARB repo rate cut of 50bps to 3.75% at its May monetary policy committee (MPC) meeting, and a further 25bps easing to 3.5% in July.”

“We see the reversal of some of 2020’s monetary policy easing taking place as soon as March 2021, albeit at a gradual pace. Our end-2021 repo rate forecast is 4.5%, even lower than it was previously (5.0%).”

“We lower our average CPI forecasts to 3.4% in 2020 (3.9% previously), 3.9% in 2021 (from 4.2% prior). Given the weaker base, we see inflation rising to 3.6% in 2022 (3.5% prior).”