Interest rate cut unlikely on rand volatility
Consumer Price Index lowest since December 2015
Inflation has fallen within the Reserve Bank’s target band of 3%-6% for the first time in eight months, but because of the volatile rand and further risks to SA’s credit rating outlook, the Bank is not expected to cut interest rates. The Consumer Price Index (CPI) came in lower than expected at 5.3% compared to 6.1% in March 2017. It is the lowest rate since December 2015. The CPI measures changes in the price of consumer goods and services purchased by households in urban areas. The biggest contributor to the lower inflation rates was food prices, down to 6.6% year on year, from 8.7% the previous month, courtesy of better rainfall. Fuel prices, down to 5.6% year on year, from 15% in April, also contributed significantly. "Both of these components were also coming off high bases following the sharp increases in prices experienced this time [in 2016] [driven by the] drought and weak rand," BNP Paribas economist Jeffrey Schultz said. Core inflation, which does not take into account fo...
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