It was also our view that we had possibly reached the bottom of the interest rate cycle. The interpretation of the high frequency data at that time was also complicated by the distortions created by the World Cup.
As the year progressed, it became increasingly apparent that the monetary policy environment in the advanced economies was likely to remain highly accommodative for longer, and this view was reinforced by the emerging sovereign debt crisis in Europe. This had implications for the rand exchange rate and its expected future path, as well as for the outlook for domestic inflation.