July 30th, 2008

South Africa
April/May move to 7.50 saw very strong portfolio inflows as funds bought back into SA after selling in January
Current move is in the background of foreign selling of local portfolio holdings
Expect inflation to peak in July at 13.2%, dipping to 8.6% in Jan '09, 6.3% in Dec '09
PSCE grew to 20.3%
- surprise upside in PSCE was from volatile corporate borrowings aggregate
- credit extended to households and mortgage aggregate advances both reduced; sign that rate hikes could be working
Next decision on 14Aug; inflation has exceeded 3-6% target range for 14 straight months
CPI expected at 12.1% in Jun vs. 11.7% in May


Thailand
Political uncertainty should keep things bid but BoT can keep things capped at 60 level
Revised upwards inflation forecast to 7.5-8.8