It is unlikely, though, that we will see inflation fall much further from here. We will probably see some ongoing dampening effect on inflation of the rise in the exchange rate, as this usually takes some time to flow through fully. Growth in labour costs, however, is no longer declining, but rising.
In this assessment, we take account of the cost incurred should risks materialize, even though the probability of this happening may be low. In this regard, both upside and downside risks need to be borne in mind.