Slowing inflation in South Africa reinforces expectations for flexible monetary policy
Official data issued by the South African Statistics Authority on Wednesday showed a slowdown in the general inflation rate of consumer prices during the month of last November, in an indication of a decline in inflationary pressures and a strengthening of the central bank’s direction towards a more flexible monetary policy.
Annual inflation recorded 3.5% in November compared to 3.6% in October, while the monthly consumer price index decreased by 0.1% after rising by the same percentage in the previous month, according to CNBC. Africa.
Economists had expected the annual inflation rate to reach 3.6%, a level within the central bank’s acceptable range, which allows inflation to deviate by one percentage point up or down from its target of 3%.
In the last monetary policy meeting, the South African Reserve Bank cut the key interest rate by 25 basis points, based on improved inflation expectations, which eased fears of… The new inflation target will restrict the bank’s ability to reduce interest rates.
The market expects that the bank will announce its decision on monetary policy on January 29, to evaluate its position on developments in inflation and economic growth, and whether it will maintain current interest rates or proceed with further monetary easing in light of improving price pressures.
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