This is the fourth consecutive inflation report that is below the mid-point of the SA Reserve Bank’s 3%-6% target range
This is the fourth consecutive inflation report that is below the midpoint of the SA Reserve Bank’s 3%-6% target rangeThe rand pared gains on Wednesday morning as consumer inflation decelerated more than expected in October, strengthening the argument that the Reserve Bank may move to cut the interest rate.
The consumer price index slowed to 3.7% in October from 4.1%, data from Statistics SA showed on Wednesday. This is below the median forecast of 3.9%, according to Bloomberg. Mercato Financial Services analyst Nico Du Plessis said subdued inflation is “not likely to be enough justification” for the Bank to cut the repo rate this week, considering SA's fiscal situation and risks to the rand.
By 10.16am, the rand had weakened 0.54% to R14.8417/$ after closing at R14.76/$ on Tuesday. It had weakened 0.43% to R16.4212/€ and 0.4% to R19.1555/£. The euro weakened 0.13% to $1.064.
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