Page 34 - EngineerIT AugustSeptember Issue 2026

ONLINE TRADING

What July’s MPC decision

signaled for traders

outh African traders received two I see newer traders place too much importance on getting the headline call
significant pieces of economic right. They decide what the rand should do, build a position around that
Sinformation within 24 hours in July. view and then discover that the market is responding to a different part of
Stats SA reported that annual consumer the announcement.
inflation had risen to 5% in June, followed
the next day by the South African Reserve A disciplined trader understands that the result is only one part of the event.
Bank’s decision to keep the policy rate What the market expected, how traders were already positioned and what
unchanged at 7%. policymakers communicated about the future can matter just as much.

Now that the announcements have come What did the July announcements tell us?
and gone, the useful question is not whether June inflation increased to 5% from 4.5% in May, reaching its highest level
a trader correctly predicted the outcome. in two years. Transport was the largest contributor to both the annual and
It is whether their process helped them monthly inflation increases, driven mainly by higher fuel prices.
interpret the information, manage volatility
and avoid making rushed decisions. The following day, the SARB kept the policy rate at 7%. However, the decision
was not unanimous. Four Monetary Policy Committee members supported
the hold, while two preferred an increase of 25 basis points.

That voting split matters because it reveals more than the unchanged rate
alone. It shows that two policymakers believed a further 25-basis-point
increase was appropriate, while the committee as a whole continued to see
upside risks to inflation.

By Francois Du Plessis, Chief Executive Officer for South Africa of CFI Financial Group South Africa.

34 | EngineerIT August/September 2026