• World
  • Columnist
  • Commodities
  • WORLD BUSINESS & ECONOMY
  • Executive Knowledge Series
  • Finance
  • Manufacturing
  • Markets
  • Risk & Governance
  • Small Business
  • Technology, Media & Innovation
  • Comments
  • Business AM WebTV
  • Login

Businessamlive
  • FRONTPAGE
  • FINANCE
    • AllAsset ManagementAuditBankingBondBudgetCapital MarketsC&I LeasingCurrencyDealDebt marketForexFund RaisingFundingGovernmentHedge FundsInsuranceInvestmentInvestorInvestor ServicesMergers & AcquistionsMoney marketTreasury BillsMortgagePensionsPersonal financePonziQuantitative EasingshareTaxationTSAWealth Management
      Finance

      Stringent regulations, business environment forced Stanbic IBTC out of BDC business

      January 15, 2021

      Finance

      Cautious equities trading see gains in Flour Mills, Mobil, Wapco push market cap to ₦21.09trn

      January 15, 2021

      Finance

      CBN issues guidelines for QR codes operation in Nigeria

      January 15, 2021

      Finance

      Global Equities: Positive sentiment buoys global markets’ performance on vaccine rollout, Biden confirmation

      January 13, 2021

  • MARKETS
  • ECONOMY
    • AllAfricaAgricAirportsAmericaAsiaAustraliaBreakthroughDealEuropeForeign InvestmentsforexGlobal marketGovernanceIMFMiddle EastNECANigeriaOutlookRich listSouth AfricaSport BusinessTradeU.KWest AfricaWorld Economic forum
      Technology

      Africa data centre market to outpace $3bn by 2025, says Turner & Townsend

      9 hrs

      Commodities

      Wheat soars as Russia considers export tax

      9 hrs

      WORLD BUSINESS & ECONOMY

      Only 20% of UK financial services professionals believe firms possess ethical commitment

      January 16, 2021

      Frontpage

      Moody’s sees negative 2021 outlook for sub-Saharan Africa, with severe economic challenges

      January 15, 2021

  • COMMODITIES
  • ENERGY
    • AllConferenceElectricityOil and GasPowerRenewable
      Frontpage

      NNPC receives $120.49m crude oil receipt in September  

      19 hrs

      Frontpage

      NNPC moves to rehabilitate downstream infrastructure, openscontract bids

      January 15, 2021

      Companies

      Ardova enters acquisition talks with Enyo as part of expansion drive  

      January 15, 2021

      Oil and Gas

      NNPC reaffirms commitment to OPEC+ agreement   

      January 15, 2021

  • TECHNOLOGY
  • MANUFACTURING
  • ANALYSIS
    • Analyst Insight

      CBN meeting and NSE in focus

      January 18, 2021

      Analyst Insight

      Once again, fiscal stimulus takes centre stage

      January 18, 2021

      Analyst Insight

      Organisations must learn from the WhatsApp story  

      January 18, 2021

      Analyst Insight

      Data privacy maturity model in organisations

      January 11, 2021

Africa

South Africa inflation at 17-month low shows end to rate hikes

May 25, 20171.2K views0 comments

South Africa’s inflation rate fell within the central bank’s target band in April for the first time in eight months, reinforcing chances that the rate-increase cycle may have come to an end.

Consumer-price inflation eased to 5.3 percent from 6.1 percent in March, Statistics South Africa said in a report released Wednesday in the capital, Pretoria. That’s the lowest rate since December 2015 and compares with the median estimate of 5.6 percent by 20 economists surveyed by Bloomberg.

The central bank’s Monetary Policy Committee, which announces its next interest-rate decision Thursday, has kept the repurchase rate unchanged for six meetings after raising it since January 2014 in a bid to keep price growth in its 3 percent to 6 percent target range. All 21 economists in a Bloomberg survey forecast the key lending rate will remain unchanged.

“The Reserve Bank is probably going to acknowledge in tomorrow’s meeting that we have reached the end of the hiking cycle,” Jeffrey Schultz, an economist at BNP Paribas Securities in Johannesburg, said by phone. “Around the September meeting, it could start to communicate that it is considering easing policy rates in the fourth quarter.”

Read Also:

  • DHL invests 126.5m rand in South Africa’s retail warehousing, logistics…
  • Analysts warn of economy unhinged as inflation bites
  • Coronation analysts see more crawling exchange rate pegs by CBN in 2021
  • Soybean, corn enjoy gains amid South America’s weather anxiety
  • Fireboy DML,Sauti Sol, ShoMadjozi lead Nigerian, South African, Kenyan…

Prices of food and non-alcoholic beverages rose 6.7 percent from a year earlier, the slowest pace since December 2015 and a fourth straight month of deceleration, the statistics agency said. Corn prices have plunged 67 percent since reaching a record in 2016, as the country recovers from the worst drought on record and is set for its biggest harvest of the grain since 1981.

“The downside surprise is likely to fuel stronger calls for a rate-cutting cycle to commence,” Gina Schoeman, an economist at Citigroup Inc. in Johannesburg, said in an emailed note. “Add in extreme global volatility and local political and policy uncertainty and, the SARB will likely keep steadfast in its prudent manner of being certain it would be embarking on a rate-cutting cycle.”

While central bank Governor Lesetja Kganyago said in an interview earlier this month the end of the rate-increase cycle doesn’t mean the regulator will start loosening policy, forward-rate agreements starting in seven months, used to speculate on borrowing costs, show traders are pricing 34 basis points of rate cuts this year. Market commentators were ahead of themselves by forecasting reductions, Kganyago said.

Inflation expectations, as measured by the five-year breakeven rate, are at the lowest in more than two years, standing at 5.38 percent compared with 6.25 percent at the start of the year. The bank projected consumer-price growth would return to within the target band in the second quarter and average 5.9 percent for the year, it said in its March 30 decision.

The economy expanded 0.3 percent last year, the slowest pace since a 2009 recession, due to a slump in commodity prices, weak demand for the country’s exports and a continuation of the worst drought since records began in 1904.

The rand has regained some ground after losing as much as 11 percent against the dollar following President Jacob Zuma’s cabinet changes that saw Pravin Gordhan dismissed as finance minister. That resulted in both S&P Global Ratings and Fitch Ratings Ltd.downgrading the nation’s foreign-currency debt to junk.

This year, the rand has been the most volatile among major and emerging-market currencies tracked by Bloomberg. It gained 0.4 percent to 13.0338 per dollar at 11:36 a.m. in Johannesburg. Yields on rand-denominated government bonds due December 2026 fell 6 basis points to 8.50 percent.

Core inflation, which excludes food, non-alcoholic beverages, energy and gasoline, slowed to 4.8 percent. The median estimate of 11 economists surveyed by Bloomberg was for 4.9 percent.


Courtesy Bloomberg

Share on Facebook Tweet Email
TagsInflation South Africa
PreviousDiversify revenues, not economy, SBM Intel report urges government
NextMobile phones disruption, acquiring business in trouble?

Leave a comment

- Cancel reply

MARKET DATA

Market Videos

Recent Posts

  • Africa data centre market to outpace $3bn by 2025, says Turner & Townsend
  • Wheat soars as Russia considers export tax
  • Tizeti expands coverage to Edo, introduces low-cost unlimited 4G services
  • NNPC receives $120.49m crude oil receipt in September  
  • Sachet Culture: Fueling consumer buying behaviour or pollution?

World

Africa

Buhari, Okonjo-Iweala congratulate Adesina over reelection as AfDB President

Europe

EU businesses to cut investments in 2020, says EIB report

America

U.S. increases cost of visa application for Nigerians

Africa

Thatcher-Loving Nigeria Candidate Plans to Overhaul Economy

Africa

AfDB scales up industrialization pace on the continent, delivers improved business access to finance, skills, energy

Frontpage posts

0

Oil rises as Saudi Arabia sees OPEC, allies Cooperation beyond 2018

Frontpage January 22, 2018

1
2

Oil, non oil sectors’ fragility causes N1trn revenue shortfall in five months

Frontpage August 18, 2020

3

Presidency weighs options on EFCC and FIRS leadership

Frontpage November 7, 2019

4

Nigeria money market assets spike 1.6% in May on increased government bonds, commercial papers

Frontpage July 18, 2017

5

FEC Approves $64.2m for Escravos power project

Frontpage September 26, 2018

SUPPORT

  • Photo Gallery
  • Help Centre
  • About Us
  • Accessibility

LEGAL & PRIVACY

  • Terms & Conditions
  • Privacy
  • Cookies
  • Copyright

SERVICES

  • Conferences & Events
  • Analysts Research
  • Advertising Rate
  • Ebooks

TOOLS

  • Portfolio
  • Newsletters
  • News feed
  • Currency Converter

SUBSCRIBE

Join us to get latest updates on business related news.

[mc4wp_form id="3076"]
  • ABOUT US
  • CONTACT US
  • CAREERS
  • TERMS & CONDITIONS
  • PRIVACY POLICY
Copyright 2017. All rights reserved. BusinessAMLive. A Businessnewscorp Member Company.