Sounds like the SARB will stay on hold
The South African central bank rate decision is a strange one. They release a bunch of info and then hold a press conference and sometime during that press conference, they say what they're going to do on rates. In the interim, you have to try and read between the lines
- Sees 5.5% CPI in Q2 vs 5.8% prior
- Sees 2017 averaging 5.7% inflation vs 5.9% prior
- Inflation outcomes in March/April surprised on the downside
- Long term inflation is uncomfortably close to the upper end of target range
- With further ratings downgrades imminent, the risk remains for rand and bonds depreciation
- Output gap estimated to have widened, consumer demand weakened
We'll have the rate announcement when it hits.
Regarding ratings, S&P (I think) is scheduled to adjust its rating in the week ahead. Government officials have been meeting with them in order to convince them to change their minds.
