South African inflation accelerated to the highest level in 10 months in July, driven by higher fuel prices.<\/p>\n
Consumer prices rose 5.1% from a year earlier compared with 4.6% in June, Pretoria-based Statistics South Africa said Wednesday in a statement on its website. That matched the median estimate of 16 economists in a Bloomberg survey.<\/p>\n
While inflation has now been inside the central bank\u2019s target band of 3% to 6% for more than a year, Governor Lesetja Kganyago has said the Monetary Policy Committee prefers price-growth expectations at 4.5% to limit the need for policy tightening.<\/p>\n
The five-year breakeven rate, a measure of traders\u2019 inflation expectations, rose to the highest level in almost two months last week as the rand tumbled to the weakest level against the dollar since June 2016.<\/p>\n
The price of gasoline was 25% higher in July than a year earlier as the rand slumped. Excluding fuel prices, inflation would\u2019ve been 4.3% last month.<\/p>\n
The MPC held its benchmark repurchase rate at 6.5% interest rate in July, citing the currency as a risk to the price outlook.<\/p>\n
The rand weakened 0.3% to R14.44 per dollar by 10:00 in Johannesburg.<\/p>\n