South African inflation unexpectedly slows in August
South Africa
on-year from 3.5% in July (ZACPIY=ECI), opens new tab, statistics agency data showed on Wednesday.
Economists polled by Reuters had predicted annual inflation would edge up to 3.6%, still comfortably within the central bank’s 3%-6% target range.
Well-contained inflation has allowed the South African Reserve Bank (SARB) to cut its main lending rate at three of its four policy meetings this year.
At its last meeting in July the SARB said it would aim for the bottom of its range, 3%, whereas before it had aimed for the middle, 4.5%.
The SARB’s next policy announcement is on Thursday, and most economists anticipate it will keep its repo rate unchanged at 7% (ZAREPO=ECI), opens new tab as it tries to steer inflation down towards its new 3% anchor.
In month-on-month terms inflation was at -0.1% in August, compared with 0.9% in July (ZACPI=ECI), opens new tab.
Annual core inflation, which strips out volatile items like food and energy, came in at 3.1% in August (ZACPYY=ECI), opens new tab, in line with analysts’ forecasts.
