South Africa’s annual inflation rate was unchanged at 4.5% in June, staying where the central bank wants the rate anchored.
Prices rose 0.4% in the month, the Pretoria-based Statistics South Africa said on Wednesday in a statement on its website. The median estimate of 16 economists in a Bloomberg survey was for annual inflation of 4.4%.
Inflation has remained at or below the 4.5% midpoint of the South African Reserve Bank’s target band every month since December. The bank lowered its inflation forecast for the year to 4.4% from 4.5% at its Monetary Policy Committee meeting last week, saying that risks to the outlook are balanced, even as there may be upside risks from the financing of state companies and global shocks.
The central bank cut the benchmark interest rate by 25 basis points to 6.5% last week. While forward-rate agreements are pricing in a 90% chance of another quarter-point reduction by the end of the year, the MPC said future policy moves would be highly data dependent.
Underlying price pressures remain subdued with core inflation, which excludes the prices of food, non-alcoholic drinks, fuel and electricity accelerating to 4.3% in June from 4.1% the previous month. — Reported by Prinesha Naidoo, with assistance from Gordon Bell, Jacqueline Mackenzie, Renee Bonorchis and Simbarashe Gumbo, (c) 2019 Bloomberg LP
