Consumer inflation quickens to 4.5% in May
JOHANNESBURG - South Africa’s headline consumer inflation inched higher to 4.5% year on year in May from 4.4% in April, data from Statistics South Africa showed on Wednesday.
On a month-on-month basis prices rose 0.3% from a 0.6% increase previously.
Core inflation - which excludes the prices of food, non-alcoholic beverages, petrol and energy - was at 4.1% year on year versus a 4.1% increase in April, and was at 0.0% month on month compared to 0.3% increase last month.
The local unit made dramatic strides against the dollar and other major currencies on Tuesday with two significant elements contributing to the rand’s relief. President Cyril Ramaphosa stated that the Eskom rescue plan is to be unveiled, while Moody's once again affirmed that the outlook for SA remains stable.
In addition, both the Fed and EU are expected to deploy stimulus policies. ECB Chief Mario Draghi has already alluded to stimulus and that, coupled with the Fed today, has added to ZAR strength, augmenting the rally since opening yesterday.
The rand quickly pushed through key technical levels, to trade significantly stronger across the board by close of markets yesterday.
All eyes will be on the local CPI data today, followed by the Federal Reserve interest rate announcement later today.
REUTERS / BUSINESS REPORT ONLINE