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21 Nov 2018 11:02
Statistics SA announced on Wednesday that annual consumer price inflation had come in at 5.1% for October, 0.2 percentage points higher than the 4.9% for September. On average, prices increased by 0.5% between September 2018 and October 2018.
The figure was in line with analysts’ expectations.
Ahead of the announcement, NKC African Economics had forecast that annual CPI would be 5.2% in October, noting the main driver would be last month’s hefty fuel price increases.
TreasuryOne, in a note to clients following the announcement, said the inflation figure meant there was a possibility of an interest rate hike on Thursday, as “inflation is creeping towards the upper end of the inflation band”.
The South African Reserve Bank’s monetary policy committee will be announcing its repo rate decision at 15:00 on Thursday.
The repo rate is the benchmark interest rate at which the bank lends money to other banks. Changes in the repo rate affect the prime lending rate, which is the lowest rate at which banks start lending to clients.
The International Monetary Fund earlier in the week urged the central bank to keep inflation at its mid-point target goal of 4.5% to preserve price stability and central bank credibility. — Fin24
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