Danske Bank: South Africa's Key Rate To Remain Stable Going Forward

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Tuesday, Danske Bank reflected upon South Africa's monetary policy meeting and said that the South African Reserve bank (SARB) is unlikely to pursue further monetary easing, and also expects the key policy rate to remain stable over the coming months.

The SARB board had unanimously decided to leave the key interest rate unchanged at 7.00%.

The Danish firm acknowledged that the continued strengthening of the rand could influence monetary policy in the future, but believed that SARB Governor Tito Mboweni and the other board members would resort to verbal intervention rather than cut interest rates to put a check to any excessive strengthening of the rand.

The firm also expects inflation to rise modestly at the end of the year despite the strong rand helping to push inflation down, following Mboweni's comments that inflation outlook "appears to be balanced". Consumer price inflation was up 6.4% annually in August, down from 6.7% in the previous month.

Tuesday, Danske Bank reflected upon South Africa's monetary policy meeting and said that the South African Reserve bank (SARB) is unlikely to pursue further monetary easing, and also expects the key policy rate to remain stable over the coming months. (Market News Provided by RTTNews)