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Johannesburg - There was no evidence yet to suggest that
inflation pressures are becoming entrenched, Reserve Bank deputy governor
Daniel Mminele was quoted as saying by the Business Day newspaper on Wednesday.
Annual inflation has edged higher since hitting a 5-year low
of 3.2% in September 2010 and is expected to rise to 5.6% in September from
5.3% in August. The September data is due to be released at 08:00 GMT.
Mminele said higher food, petrol and electricity prices had
clouded what would otherwise had been a "somewhat more benign inflation environment".
"There is no evidence thus far, to suggest these pressures
are becoming entrenched and that inflation expectations are becoming less
anchored," he said at a conference in Cape Town, according to Business Day.
Mminele said although core inflation - which excludes food,
fuel and electricity - had edged up, the "overall underlying inflation trends
appear relatively well contained for now".
The Reserve Bank expects inflation to briefly breach the
upper ceiling of its 3% to 6% target toward the end of the year and peak at
6.3% in the first quarter of 2012.
Although inflation is ticking higher, most analysts expect
the Reserve Bank to leave interest rates at 30-year lows until mid-2012, with a
few calling for a rate cut to help support a weak recovery.
The bank cut the repo rate by 650 basis points to 5.5% in
the two years to the end of 2010.
Mminele said demand in the economy was too subdued to worsen
inflation pressures in the short term, as high debt levels and job losses
should weigh on consumer spending.
The threat to inflation was the recent weakness of the rand,
he said. The rand has weakened by 14% against the dollar since the beginning of
September.
Mminele said the monetary policy had to “deal with a
delicate balance between the upside risks to inflation and the downside risks
to growth”.
The next monetary policy committee meeting is on November
8-10.
