Hopes raised for interest-rate cut as inflation improves in January
And inflation, as measured by the annual change in the consumer price index, was expected to slow in January thanks to a drop in fuel prices
Inflation moderated to 4.4% in January from 4.7% in December, raising hopes of an interest-rate cut in March. Inflation, as measured by the annual change in the consumer price index (CPI), was expected to slow in January thanks to a drop in fuel prices. The slowdown to 4.4% was better than the 4.5% economists’ consensus reported by Trading Economics. Statistics SA reported on Wednesday that January’s CPI, which was set to 100 points in December 2016, rose to 105 points from 104.7 points in December. The annual change in CPI is the key measure used by the Reserve Bank’s monetary policy committee to set its repo rate. The committee is scheduled to announce its next interest rate decision on March 28. At 4.4%, inflation is now slightly under the halfway mark of the Reserve Bank’s target range of keeping inflation above 3% but below 6%. "Our forecast is for a 25 basis point reduction in March. Thereafter, the rates are expected to remain steady until September 2019," Nedbank's economics...
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