SARB to adjust interest-rate modeling tool

South Africa’s central bank will probably introduce a raft of changes to modeling that informs monetary policy decisions, including a measure to better anchor inflation expectations. The first major improvement to the so-called Quarterly Projection Model in six years should enhance its forecasting ability “while reducing the application of judgment and thus potential sources of bias in forecasting,” the South African Reserve Bank (SARB) said Tuesday in its six-monthly Monetary Policy Review. The new model will be used as soon as it has been approved, most likely from the bank’s July rate-setting meeting, it said in a response to emailed questions.