Inflation in South Africa eased a bit more than expected, to 7.4% y/y, in November and there were encouraging signs that core price pressures are fading. The figures will provide room for the Reserve Bank to ease off the monetary brakes but it will be some time before it will feel that it has tamed the “inflation monster”. We forecast a 50bp rate hike, to 7.50%, in January and 50bp more tightening beyond that.
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