In a surprising turn of events, South Africa’s inflation rate for August 2024 fell to 3.3%, undershooting the 3.6% forecast by economists. This decline, attributed to softer fuel and food prices, has sparked speculation that the South African Reserve Bank (SARB) might implement another interest rate cut during its upcoming policy meeting on Thursday. The SARB has already reduced rates three times this year, with the latest cut in July, when it set a new inflation target of 3%. Prior to the release of the inflation data, the consensus was that the central bank would maintain the repo rate at 7%. However, the unexpected drop in inflation, coupled with falling bond yields and a stronger rand, has led some analysts to predict a 25 basis point cut. Razia Khan, chief economist for Africa and the Middle East at Standard Chartered, described the inflation release as a ‘game changer,’ suggesting that the September meeting could be pivotal. While some analysts remain cautious, citing potential price shocks from recent tariffs imposed by the U.S. on South African exports, others argue that a flagging economy provides additional justification for easing monetary policy. The SARB has acknowledged that the impact of these tariffs on growth and inflation could be modest, but this has yet to be reflected in official data. The central bank’s decision will be closely watched as it seeks to balance inflation control with economic stimulation.