The current interest-rate tightening cycle will be ‘moderate,’ Kganyago said.
South Africa’s inflation accelerated to 5%, keeping pressure on the central bank to maintain its gradual path of monetary policy tightening.
The inflation rate rose from 4.7% in June, the Pretoria-based statistics office said on its website on Wednesday. The median estimate of 25 economists surveyed by Bloomberg was 5%. Prices gained 1% in the month.
The central bank raised its benchmark repurchase rate in July for the first time in a year as it forecast inflation will exceed the 3% to 6% target band for the first half of next year. The current interest-rate tightening cycle will be “moderate,” Governor Lesetja Kganyago said on August 11.
While the central bank cites the rand’s slump as the main risk to the inflation outlook, the pass-through effects to prices from the weakening currency may be easing. The rand has dropped 10% against the dollar this year.
Core inflation, which excludes food, non-alcoholic beverages, gasoline and electricity costs, slowed to 5.4% in July from 5.5% in the previous month.
©2015 Bloomberg News