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South Africa\u2019s inflation rate reached the mid-point of the central bank\u2019s target range of 3% to 6% in December – something the Reserve Bank says would allow for flexibility in dealing with price shocks.<\/p>\n
Consumer-price growth slowed to 4.5% from a year earlier compared with 5.2% in November, the Pretoria-based Statistics South Africa said in a statement on its website Wednesday.<\/p>\n
That matched the median estimate of 19 economists surveyed by Bloomberg.<\/p>\n
Inflation decelerated after a stronger rand and lower international crude-oil prices led to gasoline prices falling for the first time in two months in December.<\/p>\n
They reached record-high levels in October. Core inflation, which excludes the prices of food, non-alcoholic beverages, fuel and electricity, was unchanged at 4.4%.<\/p>\n
The South African Reserve Bank lowered its 2019 inflation forecast to 4.8% from a previous estimate of 5.5% largely due to lower assumed oil prices.<\/p>\n
Its price-growth forecast assumes an average oil price of $62 per barrel in 2019.<\/p>\n
The central bank is seeking to anchor inflation at 4.5% to allow for flexibility in dealing with price shocks, Reserve Bank Governor Lesetja Kganyago told Bloomberg TV in Davos Tuesday.<\/p>\n
It increased the benchmark repurchase rate for the first time in more than two years in November even as inflation didn\u2019t breach the upper end of the range.<\/p>\n
The bank\u2019s Monetary Policy Committee voted to hold the key rate at 6.75% last week. The improvement in the inflation outlook suggests that November\u2019s increase was not the start of a tightening cycle. Future policy moves will be data-dependent, the bank said.<\/p>\n