South Africa’s inflation rate, which hit a record high of 7.8 per cent in July, edged down to 7.6 per cent in August from a year earlier, fuelled by a drop in fuel prices, the country’s statistics agency (StatsSA) said.
“The monthly increase in the consumer price index was 0.2%, the lowest since January 2022. The welcome drop in fuel costs had an impact on the overall transport index, which fell by 1.0% between July and August,” StatsSA said in a statement.
Fuel prices fell 3.8 per cent between July and August, with gasoline down 5.0 per cent and diesel down 0.9 per cent.
South Africa’s Expected Rate Hikes
At the last meeting in July, the implied policy rate path of the central bank’s quarterly projection model, which the MPC uses as a guide, indicated the benchmark will be at 5.61% by year-end.
Rate setters have already raised the key rate by a cumulative 200 basis points since November.
Previous spikes in food and fuel costs and increased pressure on the rand from accelerated monetary tightening by the US — including a 75 basis-point rate hike expected on Wednesday — may lead to second-round wage and price effects.
Yields on South African benchmark bonds reversed an earlier rise after the release of the data, falling four basis points from closing levels to 10.96%. The rand narrowed losses and was at 0.2% weaker at 17.7202 per dollar by 10:43 a.m. in Johannesburg.
