On the 23rd of March Moodys announced that they would not be cutting South Africa’s sovereign rating and that they would keep South Africa at investment grade. Moodys also revised its credit outlook on South Africa from negative to stable. Moodys said that the previous weakening of national institutions was gradually reversing which supports an economic recovery. The South African Repo Rate was cut by 25basis points on the 28th of March. This was in line with market expectations; however the voting by MPC members was not unanimous, 4 voted for a cut with 3 voting to keep rates on hold. The Governor sighted the main reason for a rate cut was an improvement in inflation with the year on year CPI number being 4 % in February , down from 4.1% in January. The average inflation for 2018 is expected to be around 5% which is higher than current levels. The Governor indicated that the MPC would prefer to see inflation expectations anchored close to the midpoint of the target band. Inflation is expected to turn the latter half of 2018 and for this reason rates are most likely to remain unchanged. The forward rate agreement market is also predicting rates flat for the year. The rand closed at the end of March at 11.83 to the USD and one year NCDs traded lower at 7.675%.Floating rate notes still offer good value in the money market funds