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South Africa's inflation falls further below midpoint of target range
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February's data represents a price growth within the Reserve Bank's target range of 3 to 6 percent for the eleventh consecutive month.
Inflation rates fell further below the target mid-point in South Africa in February, giving the country's central bank, Reserve Bank of South Africa (RBSA), additional reason to ease monetary policy next week.
The Pretoria-based Statistics South Africa said Tuesday in a report on its website that, inflation trickled down to 4 percent, the lowest level recorded in the last three years, from 4.4 percent in January.
February's data represents a price growth within the Reserve Bank's target range of 3 to 6 percent for the eleventh consecutive month, the longest since 2015. It, however, remains to be seen if the Monetary Policy Committee will announce a change in its benchmark lending rate when it meets Wednesday next week. If it maintains its stance, it will be the fourth meeting in a row in which rates are held at 6.75 percent.
“Some of the more hawkish members of the committee are likely to move onto the dovish side next week,” Jeffrey Schultz, a senior economist at BNP Paribas said by phone in Johannesburg. “As a result we think that there is scope for the SARB to cut by 25 basis points.”
Inflation rates are expected to remain within the government's target range until the end of 2019 according to the central bank.
The South African Rand has gained about 9 percent against the U.S. dollar since Cyril Ramaphosa was elected to lead the ruling African National Congress last December, according to Bloomberg data.
Core inflation, which excludes the prices of food, non-alcoholic beverages, energy and gasoline, steadied at a six-year low of 4.1 percent in February.
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