South Africa’s CPI Slows, SARB Rate Cut Likely

Image Source: moneyweb.co.za

In August, South Africa’s Consumer Price Index (CPI) decelerated to 4.4% year-on-year from 4.6% in July, marking its slowest pace in almost three and a half years. This strengthens the argument for the South African Reserve Bank (SARB) to initiate a cycle of interest rate cuts on Thursday, 19 September.

The CPI data, released by Statistics South Africa (Stats SA) on Wednesday, suggests that the SARB’s monetary policy over the past 12 to 18 months is yielding positive outcomes. The CPI has stayed within the SARB’s target range of 3% to 6% for two consecutive months. Additionally, the potential decrease in retail fuel prices in October is favorable for keeping the CPI within this range.

The SARB is expected to proceed cautiously with a 25-basis-point cut, bringing the key repo rate to 8.0% and the prime lending rate for consumers to 11.5%. The SARB will closely monitor food inflation, which rose year-on-year in August to 4.1% from 3.9% in July.

The anticipated rate cut by the US Federal Reserve’s Federal Open Market Committee may influence the SARB’s decision. South African markets will have much to process between now and late Thursday.

About The Author

Lebone

I hold a Diploma in Journalism and Media Studies from Damelin, where I gained a solid foundation in various aspects of media communication and reporting. My experience includes writing travel articles for “What’s On In Mzansi,” where I had the opportunity to explore and share insights about South Africa’s diverse attractions and cultures. In addition to my writing, I have also worked as a radio host, where I developed my skills in engaging audiences and delivering compelling content. This combination of education and practical experience has equipped me with a comprehensive understanding of the media landscape and storytelling techniques.

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