The rand kept to its weaker bias at midday on Thursday despite producer inflation coming in pretty much as expected. A continued improvement in inflationary prospects for the rest of the year suggests a possible interest-rate cut later in 2017. The producer price index (PPI) came in at 4.8% year on year in May from 4.6% in April. The slight acceleration was due to higher oil and petrol prices, but further pressure on producer inflation is set to subside next month, with the petrol price expected to drop by about 67c a litre on July 5. Both PPI and consumer price index (CPI) inflation were expected to moderate in 2017, with CPI inflation returning to the 3% to 6% target range, said Investec economist Annabel Bishop. "However, the Reserve Bank is likely to maintain a cautious policy stance with the rand flagged as an upside risk to the inflation outlook," she said. Cooling inflation and weaker-than-expected growth would see the Bank beginning to ease monetary policy in the second half...
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