The Bank’s latest inflation forecast is for an average of 6,4 per cent in 2016, 5,8 per cent in 2017 and 5,5 per cent in 2018. The moderating inflation trajectory reflects recent policy tightening by the Bank, an expected deceleration in food price growth and an improvement in the exchange rate outlook relative to previous forecasts.
The MPC is of the view that should the forecasts materialise, the hiking cycle may be nearing its end. However, this does not mean the interest rate reductions are imminent, as we would like to see inflation more firmly within the target range on a sustainable basis over the forecast horizon.