South Africa\u2019s inflation rate fell for a second consecutive month as the rise in food prices was more benign.<\/p>\n\n\n\n
Consumer prices rose 5.2% in April from a year earlier, compared with 5.3% in the prior month, Pretoria-based Statistics South Africa said Wednesday in a statement on its website. <\/p>\n\n\n\n
The median of 18 economists\u2019 estimates in a Bloomberg survey was for the inflation rate to remain unchanged.<\/p>\n\n\n\n
The data is unlikely to convince monetary policymakers who meet next week to lower a benchmark rate that\u2019s remained at a 15-year high of 8.25% since May 2023. <\/p>\n\n\n\n
Governor Lesetja Kganyago has repeatedly stressed that the central bank will wait for inflation to slow to the midpoint of its 3% to 6% target range before policy is adjusted.<\/p>\n\n\n\n
\u201cDespite this better-than-expected outcome, with the South African Reserve Bank increasingly signalling its preference for a 3% point inflation target, we expect no policy rate easing until November,\u201d Razia Khan, chief economist for Standard Chartered Bank, said.<\/p>\n\n\n\n
While money markets are assigning no chance of a rate cut at next week\u2019s MPC meeting, traders added to wagers on policy easing over the next 12 months. Forward-rate agreements are pricing in a 92% chance of a 25 basis point cut by January<\/strong>, compared with 80% before the CPI data.<\/p>\n\n\n\n Cooling inflation combined with a rally in the rand ahead of South Africa\u2019s elections next week bodes well for the Reserve Bank\u2019s price growth forecasts.<\/p>\n\n\n\n The rand has strengthened 5.6% over the past month on expectations that the ruling African National Congress may not need to form a coalition with a left-leaning party if it loses its parliamentary majority.<\/p>\n\n\n\n Most opinion polls suggest support for the ANC will dip below 50% for the first time since it took power in the country\u2019s first multiracial vote in 1994.<\/p>\n\n\n\n Food inflation cooled to 4.4% in April, from a prior 4.9%. Bread and cereal prices continued to slow, easing 4.3% from 5%, while egg inflation posted its fifth month of declines, softening 25.1%. Core inflation, which excludes food and energy costs, was 4.6%, compared to 4.9% the prior month.<\/p>\n\n\n\n
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