adminPretoria. – South Africa’s inflation rate fell to 5,9 percent in September to within the central bank’s target zone for the first time in seven months and easing pressure on policy makers to raise interest rates.
Inflation slowed from 6,4 percent in August, the Pretoria-based statistics office said on its website yesterday. The median estimate of 27 economists surveyed by Bloomberg was 6,1 percent. Prices were unchanged in the month.
The Reserve Bank kept its benchmark repurchase rate unchanged at 5,75 percent last month even as a weakening rand threatened to keep inflation above the regulator’s 3 percent to 6 percent range. The economy is forecast to expand at the slowest pace this year since the 2009 recession after labour strikes forced mines and factories to temporarily halt operations. An 8 percent drop in Brent crude prices last month helped contain inflation.
“The oil price decrease, our largest import product has caused this slight deflation,” Francois Stofberg, an economist at Efficient Group Ltd, said by phone from Pretoria. “This is a good sign that the Reserve bank might not increase rates, but that is also dependent on the economic data that will come from the US and China.”
Yields on government rand-denominated bonds due December 2026 fell five basis points to 7,97 percent, the lowest on a closing basis since September 4 in Johannesburg. – Bloomberg.
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