- Morgan Stanley analysts Andrea Masia and Arnav Gupta now expect the South African Reserve Bank to raise its policy rate by 25 basis points to 7.25% on Sept. 23, reversing a prior call for a hold.
- The bank frames the hike as "insurance" against a sequence of supply shocks that delays inflation's convergence to the 3% target and eventually affects inflation expectations.
- Renewed oil-price pressure is the driver of the revised view, raising the risk that South African inflation takes longer to return to target.
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“insurance”