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SARB surprises with 25bps interest rate hike
SARB surprises with 25bps interest rate hike
SARB has raised interest rates by 25bps, taking repo to 7.25% and prime rate to 10.75%. SARB has also drastically revised their growth for the economy down in 2023 to 0.3% from 1.2% previously, as load-shedding is severely hampering growth. A material reduction in load-shedding could raise the growth again. Inflation is to average 5.4% in 2023, so back within the target band of SARB but warns that there are still upside risks to the inflation outlook. Food and energy prices could be the main culprits.
US GDP, Jobless Claims Numbers Make 2023 Rate Cuts Unlikely
After seeing 4Q 2022 GDP growth come in above estimates at 2.9% and initial jobless claims drop to 186,000, the US economy is still doing well. That lessens the potential for the rate cuts now priced in the fed fund futures at any point in 2023. The strong numbers could delay a US recession in 2023, and all eyes will shift to next week’s Federal Reserve Meeting. The Fed is set to only hike by 25bps next week and could be at the top of the hiking cycle.
Rand still within range
USD/ZAR is still trading in the broader R16.80 to R17.30 for now and feels comfortable at this stage. Today was a bit more volatile with R17.19 the high after the US GDP and a smaller SARB rate hike after testing R17.01 in early trade. We have settled at R17.14 for now and will await more international news to get direction, and this could well be in the form of the Fed meeting next week.
#SARB #InterestRate #InterestRateRiskManagement #RepoRate #PrimeRate #Economy
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By Markets Update with TreasuryONESARB surprises with 25bps interest rate hike
SARB has raised interest rates by 25bps, taking repo to 7.25% and prime rate to 10.75%. SARB has also drastically revised their growth for the economy down in 2023 to 0.3% from 1.2% previously, as load-shedding is severely hampering growth. A material reduction in load-shedding could raise the growth again. Inflation is to average 5.4% in 2023, so back within the target band of SARB but warns that there are still upside risks to the inflation outlook. Food and energy prices could be the main culprits.
US GDP, Jobless Claims Numbers Make 2023 Rate Cuts Unlikely
After seeing 4Q 2022 GDP growth come in above estimates at 2.9% and initial jobless claims drop to 186,000, the US economy is still doing well. That lessens the potential for the rate cuts now priced in the fed fund futures at any point in 2023. The strong numbers could delay a US recession in 2023, and all eyes will shift to next week’s Federal Reserve Meeting. The Fed is set to only hike by 25bps next week and could be at the top of the hiking cycle.
Rand still within range
USD/ZAR is still trading in the broader R16.80 to R17.30 for now and feels comfortable at this stage. Today was a bit more volatile with R17.19 the high after the US GDP and a smaller SARB rate hike after testing R17.01 in early trade. We have settled at R17.14 for now and will await more international news to get direction, and this could well be in the form of the Fed meeting next week.
#SARB #InterestRate #InterestRateRiskManagement #RepoRate #PrimeRate #Economy