Inflation eases in December on record fuel price cuts
A combination of a lower international oil price and a stronger rand relative led to a big decrease in the price of fuel
Inflation eased to 4.5%, the mid-point of the Reserve Bank's 3% to 6% target range, in December, aided by a steep petrol price decrease that month. This was in line with economists polled by Bloomberg. Inflation eased from 5.2% in November 2018.
In an interview with Bloomberg TV in Davos on Tuesday, Reserve Bank governor Lesetja Kganyago said anchoring inflation at the midpoint of its 3% to 6% target range allowed the central bank the flexibility to deal with price shocks. “We would like to see inflation and inflation expectations moving closer to the midpoint of our inflation targeting range because that gives us the flexibility we are actually looking for ... we should be flexible within the target rather than flexible outside of the target,” Kganyago told Bloomberg. After being hard hit by fuel price increases for much of 2018, motorists welcomed a record fuel price drop of R1.84/l for petrol and R1.45/I for diesel in December. This was because of a combination of a lower i...