South Africa’s inflation rate fell for a second consecutive month as the rise in food prices was more benign.
The median of 18 economists’ estimates in a Bloomberg survey was for the inflation rate to remain unchanged. Governor Lesetja Kganyago has repeatedly stressed that the central bank will wait for inflation to slow to the midpoint of its 3% to 6% target range before policy is adjusted. While money markets are assigning no chance of a rate cut at next week’s MPC meeting, traders added to wagers on policy easing over the next 12 months. Forward-rate agreements are pricing in aCooling inflation combined with a rally in the rand ahead of South Africa’s elections next week bodes well for the Reserve Bank’s price growth forecasts.
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