Inflation increased to 4.6% from 4.2% during the month. This is still well within the current inflation target range of 3-6 %. Risks to inflation remain evenly balanced and inflation is expected to remain within the target range for an extended period.

The money market curve remains positive (long term interest rates higher than short term interest rates) during the month as the market expects that we have seen the bottom in interest rates with the probability of higher inflation towards year end.

Money market rates in the 3 months remained unchanged at 5.575% and the 12 months rate increased from 6.37% to 6.42%. Treasury bills in the 91 days traded above the bank rates, and credit spreads on short term corporate credit narrowed during the month.

The current forward rates suggest that the repo rate could increase towards year end.