Inflation is contained and an interest rate rise is unlikely, say analysts
The Reserve Bank could take a more hawkish stance, though, as a weakening currency puts upward pressure on inflation
South African consumer inflation reached its fastest pace so far this year in June, after higher fuel prices stoked transport costs, limiting room for the Reserve Bank to consider cutting its benchmark rate on Thursday. The annual inflation rate was 4.6% compared with 4.4% in May, Statistics SA said on Wednesday. The rand had its worst month in more than two years in June as the US and China exchanged tariff blows at a time when the prospect of rising American rates also weighed on emerging market assets. The weaker currency and higher oil prices added upside risks to inflation. The inflation rate has exceeded the 4.5% midpoint of the Bank’s target range of 3%-6% for the first time since December. The monetary policy committee has made it clear it also prefers to see expectations for future inflation close to 4.5%. Repo rate at 6.5% But, despite the acceleration, inflation remains well contained in the target range, and analysts expect rates to remain unchanged at 6.5% at Thursday’s...
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