SA August inflation above expectation

File photo: David Ritchie.

File photo: David Ritchie.

Published Sep 17, 2014

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Johannesburg - South Africa’s inflation rate unexpectedly rose to 6.4 percent in August, exceeding the central bank’s target for a fifth month.

Inflation accelerated from 6.3 percent in July, the Pretoria-based statistics office said on its website today. The median estimate of 28 economists surveyed by Bloomberg was 6.2 percent. Prices rose 0.4 percent in the month.

The Reserve Bank will probably keep its benchmark repurchase rate unchanged at 5.75 percent tomorrow, according to 17 of the 24 economists surveyed by Bloomberg. The economy is forecast to expand at the slowest pace this year since the 2009 recession after labour strikes forced mines and factories to temporarily halt operations. Inflation expectations remain anchored, the bank said in its Quarterly Bulletin last week.

The rand has lost 3.1 percent against the dollar in the past month, taking its decline since the start of 2013 to 22 percent, the worst among 16 major currencies tracked by Bloomberg.

The core inflation rate, which excludes food, non-alcoholic beverages, gasoline and electricity costs, rose to 5.8 percent in August, the highest in more than four years, from 5.7 percent in the previous month.

Bloomberg

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