A spokesperson from the South African Reserve Bank has confirmed Wednesday’s Monetary Policy Committee (MPC) meeting had started and everything is “running according to schedule”.
“The meetings always start on time at 9am and everything is on schedule, with the announcement due tomorrow at 3pm,” the spokesperson said.
The press conference starts on August 3 at 2pm in Pretoria, while the announcement will be broadcast live by the South African Broadcasting Corporation’s channel 3 between 3pm and 3.30pm.
A survey of 13 economists by I-Net Bridge has found that the consensus forecast is for a 50 basis point rate-hike on Thursday when the MPC meets to finalise its rates decision.
Since South Africa’s producer inflation came in much higher than expected late last week at 7,5% for June from 5,9% before, changes have, however, occurred in forecasts for total increases in the current tightening cycle, with most economists moving their forecasts upwards by 50 basis points.
Forecasts for the August increases in rates ranged from 25 basis points to 50 basis points, with only one economist forecasting the 25 basis point increase, with all the others expecting 50 basis points. One economist originally felt the 50 point increase would come in October, but after PPI, changed this to an August increase.
Views varied more considerably as to the length and extent of the current tightening cycle, with forecasts ranging from 75 to 200 basis points, (with the economist at 75 basis points saying they wanted to review this once more data
became available).
The highest forecast for the tightening cycle was at 200 basis points, with four of the 13 economists forecasting this range, which includes the 50 basis points increase on June 8.
The consensus for the entire tightening cycle was at 150 basis points, with seven of the 13 economists surveyed preferring this outlook. – I-Net Bridge