At yesterday’s SARB policy meeting, it was decided unanimously to lower the policy interest rate from 8.0% to 7.75%, as expected. This rate cut came after October’s CPI (consumer price index) showed a significant slowdown, falling below the inflation target of 3-6%. Governor Kganyago stated, “We did not discuss a 0.5% rate cut” and emphasized that a cautious approach is needed, taking into account the risk outlook. The market had already priced in this move, and after the announcement, the ZAR/JPY rose to 8.58 yen. However, due to rising geopolitical risks from Russia, the upward movement was limited.
South Africa’s policy interest rate remains high, and if the market stabilizes, there may be buying interest targeting the interest rate differential.
However, in the short term, given the rising geopolitical risks, we should be cautious about the downside risks.
ZAR/JPY Expected Range: 8.58 yen – 8.45 yen
Please note that the above information does not guarantee profits. Make your trading decisions at your own risk.