KEY THEMES
The modest increase in headline inflation and the muted monthly reading in August could be attributed to the recent surge in global commodity prices and supply disruptions. Our expectations for the MPC’s decision today remains strongly inclined towards keeping rates steady. At this stage, the major concern for the CBE will be how to keep inflation expectations well anchored around its targets while mitigating the effect of protracted uncertainties. Such uncertainties include the pandemic’s trajectory and its tail risks and the effect of the Fed's tapering talks on financial markets sentiment and capital inflows.
For more details, please read our MACROView published yesterday.