South African inflation expectations for the next two years declined, signaling progress in the central bank’s efforts to rein them in before its policy meeting later this month. Average inflation expectations two years ahead — which the bank’s monetary policy committee uses to inform its decision-making — fell to 4.9% in the second quarter from 5.2% previously, according to a survey released on Friday by the Stellenbosch-based Bureau for Economic Research.
5% midpoint of the bank’s target range, where it prefers to anchor them. The reading, coupled with easing inflation pressures, may pave the way for interest rates to be lowered later this year. Read: SA to maintain rate pause as inflation holds steady For now, however, analysts expect the MPC will leave the key interest rate at 8.25% for a seventh straight meeting on July 18.