Weak inflation gives ammunition for rate cut
http://www.busrep.co.za/index.php?from=rss_Business Report&fArticleId=5575677
Positive news on the inflation front has provided ammunition for those who believe the Reserve Bank should cut its repo rate from its present level of 6.5 percent. Statistics SA reported yesterday that consumer inflation came in at an annual 4.2 percent in June, down from 4.6 percent in May and better than the 4.5 percent median estimate of 21 economists polled by Bloomberg.
Ian Cruickshanks, the head of strategic research at Nedbank Capital, said that after the data was released the money market started betting on a 60 percent chance of another 50 basis point cut in the Reserve Bank’s repo rate. Expectations of another cut were reflected in forward rate agreements, contracts that run for three months starting some time in the future.
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