Inflation & Prices
Traders Add to South African Rate-Cut Bets as Inflation Slows
- Consumer prices rose an annual 2.8% in October; est. 3%
- Economists expect quarter-point interest rate cut Thursday
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Traders raised bets that South Africa’s central bank will deepen its interest-rate cutting cycle after inflation slowed more than expected in October.
Forward-rate agreements, used to speculate on borrowing costs, now see 71 basis points of cuts over the next 12 months, compared with 64 at the close on Tuesday. That’s after data from the statistics office showed the annual inflation rate cooled to 2.8%, compared with 3.8% in the prior month - its lowest level since June 2020. The outcome was better than the 3% median estimate of 15 economists in a Bloomberg survey.