The South African Reserve Bank (SARB) is expected to keep its interest rate unchanged at 7 percent during its policy review meeting on Thursday, said Commerzbank in a research note. June’s inflation print was consistent with expectations, moving further away from the central bank’s target range. However, the rise is possibly not sufficient to call for a rate hike, according to analysts. Moreover, the USD/ZAR pair has fallen 10 percent since the end of May, indicating appreciation of the South African rand.

Overall, things are moving in the central bank’s direction, even if the developments have been aided by external factors, such as easier assumed trajectory of Fed rate hikes, noted Commerzbank. Given the widely upbeat sentiments towards emerging markets, the South African Reserve Bank does not seem in a hurry to hike rates from the current levels.

Yesterday, South Africa’s June inflation data was released that showed inflation accelerating to 6.3 percent year-on-year in the month from 6.1 percent in May. According to Statistics South Africa, prices on a monthly basis rose 0.6 percent, following a rise of 0.2 percent in May. Core inflation, excluding prices of petrol, energy, non-alcoholic beverages and food accelerated a bit to 5.6 percent year-on-year and 0.4 percent month-on-month in June.