South Africa Real Rate at 19-Year High Unlikely to Spur Big Cut
- SARB likely to be cautious due to narrow differential with US
- Traders, economists predict a 25-basis point cut on Thursday
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South Africa’s real, inflation-adjusted interest rates reached the highest level in 19 years after price pressures cooled, but that’s unlikely to embolden the central bank to cut borrowing costs by more than a quarter point.
Data Wednesday showed the annual inflation rate slowed to 4.4% in August from 4.6% the prior month, widening the gap to the central bank’s policy benchmark to 385 basis points, or the most since July 2005.