(3 Minutes Read)
The latest data may prompt policymakers, who cut the key rate to 7.25% from 7.5% in May, to cautiously lower borrowing costs by another quarter. Analysts further said that the possibility of a central bank rate cut on July 31, with forward-rate agreements pricing in 24 basis points of easing compared with 22 basis points on Tuesday.
Analysts say South Africa’s central bank will extend its interest rate-cutting cycle next week after inflation quickened less than expected.Consumer prices rose 3% in June from a year earlier compared with 2.8% in May, Pretoria-based Statistics South Africa said on Wednesday in a statement on its website. The median estimate of 12 economists in a Bloomberg survey was 3.1%.
Inflation has now been near the floor of the monetary policy committee’s 3%-to-6% target range for nine straight months, while core inflation slowed to a more than four-year
The latest data may prompt policymakers, who cut the key rate to 7.25% from 7.5% in May, to cautiously lower borrowing costs by another quarter.Analysts further said that the possibility of a central bank rate cut on July 31, with forward-rate agreements pricing in 24 basis points of easing compared with 22 basis points on Tuesday.
Stocks and bonds extended gains with the FTSE/JSE Africa All Share index rising 0.9% and yields on benchmark 2035 securities falling three basis points to 9.82%. The rand was steady against the dollar by 11 a.m. in Johannesburg.
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The main contributors to the upswing in inflation were housing, utilities and food, and non-alcoholic beverage prices. It reached a 15-month high of 5.1% as stewing beef, mince, and steak costs jumped because of an outbreak of foot-and-mouth disease. Prices of stewing beef climbed 21.2% — the fastest pace of record.
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