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Inflation falls for third month in a row

Jul 19 2017 10:17

Cape Town - Inflation decreased for the third month in a row in June, with the annual consumer price index (CPI) falling to 5.1% after a drop to 5.4% in May, Statistics SA announced on Wednesday.

"This is the third month in a row that we are back within the inflation target band," TreasuryOne said in reaction on Wednesday. "All eyes will be on the SA Reserve Bank's monetary policy committee tomorrow (on Thursday) to see if they make a move on interest rates."

The rand was 0.43% weaker against the dollar on Wednesday, trading at R12.95 against the greedback. It had earlier traded at a low of R12.89/$.

SARB's inflation target band is between 3% and 6%. The change in South Africa's interest rate is often done to keep inflation within this band. The repo rate is currently at 7%, with the bank's lending rate at 10.5%.

CPI increased by 0.2% month-on-month in June 2017.

Clothing and footwear decreased from 0.2 of a percentage point in May to 0.1 of a percentage point in June. The index increased by 3.8% year-on-year (y/y), Stats SA said.

Transport decreased from 0.8 of a percentage point in May to 0.5 of a percentage point in June. The index increased by 3.3% y/y.

Restaurants and hotels decreased from 0.2 of a percentage point in May to 0.1 of a percentage point in June. The index increased by 4.1% y/y.

GRAPH: CPI headline index and headline inflation (Source: Stats SA)


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stats sa  |  repo rate  |  inflation  |  sa economy  |  cpi
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