Lower inflation creates rates dilemma for Reserve Bank

SA's increasingly benign inflation landscape gives Reserve Bank governor Lesetja Kganyago a window to cut rates, according to economists

21 November 2019 - 05:10A drop in consumer inflation to its lowest level in almost nine years may open the window for the Reserve Bank to surprise financial markets and cut interest rates, providing relief to a struggling economy.

Underscoring weak demand in the domestic economy, the rate of increase in consumer prices, as gauged by the annual change in the consumer price index , slowed to 3.7% in October, down from 4.1% in September. These levels have not been seen since February 2011, Stats SA said.A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

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