Why SA Reserve Bank won’t cut rates until 2019

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Emerging markets economist Peter Attard Montalto of Nomura. (Photo: LinkedIn)
Emerging markets economist Peter Attard Montalto of Nomura. (Photo: LinkedIn)

Cape Town – Emerging markets economist Peter Montalto of Nomura believes the South African Reserve Bank (SARB) will not cut its repo rate of 7% until 2019.

“Our baseline remains that the SARB will not cut rates,” he said in a note to investors on Tuesday. “Indeed, we see the hurdle to cuts as very high through end-2018.”

Montalto said while there is a “strong view in the market that the SARB is opportunistic and will look for any excuse to cut, we think this couldn’t be further from the reality”.

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