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SA inflation accelerates to 5.9%

Johannesburg - South Africa’s inflation rate rose to 5.9 percent in February as a weaker rand boosted the cost of fuel and other goods.

Inflation accelerated from 5.4 percent in January, Pretoria-based Statistics South Africa said on its website today.

The median estimate in a Bloomberg survey of 19 economists was 5.6 percent.

Prices rose 1 percent in the month.

“We’ve had quite hefty fuel price increases,” Jana le Roux, an economist at Johannesburg-based Econometrix Treasury Management, said by phone before the data was released.

“The rand has been weakening quite a bit in recent months.”

The rand is the worst performer this year of 25 emerging- market currencies tracked by Bloomberg in January, weakening 8.2 percent against the dollar.

This helped raise gasoline prices 12 percent in February compared with the same month a year earlier.

The inflation rate will probably climb above the central bank’s 3 percent to 6 percent target range in the second quarter, Le Roux said.

Reserve Bank Governor Gill Marcus will keep the repurchase rate at 5 percent later today, according to all 19 economists surveyed by Bloomberg.

Accelerating inflation will balance out flagging economic growth in the bank’s decision, Le Roux said.

The statistics agency adjusted the consumer-price basket with effect from January to give more weighting to electricity and gasoline prices. - Bloomberg News

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