23 March 2016

South Africa: Shocker As Inflation Breaches Sarb Band Yet Again

Photo: Affordable Housing Institute
Johannesburg traffic (file photo).

The annual consumer price inflation (CPI) was 7% in February 2016, up from 6.2% in January 2016 - when it breached the SA Reserve Bank's target range, Statistics SA announced on Wednesday.

This is the highest rate since May 2009 when the rate was 8%. The CPI increased by 1.4% month-on-month in February 2016.

Last week, Sarb governor Lesetja Kganyago announced a 25 basis-point hike in interest rates to 7% to help keep inflation in check. This was after Sarb's monetary policy committee (MPC) decided to hike the repo rate by 50 basis points to 6.75% at its last meeting in January this year. This means the prime interest rate is now 10.5%.

The latest data shows that food and non-alcoholic beverages increased from 1.1 percentage points in January to 1.3 percentage points in February. The index increased by 8.6% year-on-year. Alcoholic beverages and tobacco decreased from 0.5 of a percentage point in January to 0.4 of a percentage point in February. The index increased by 7.6% year-on-year.

Transport increased from 0.9 of a percentage point in January to 1.3 percentage points in February. The index increased by 8.7% year-on-year. Miscellaneous goods and services increased from 1.0 percentage point in January to 1.1 percentage points in February. The index increased by 6.8% year-on-year.

Source: Fin24

More on This

Inflation Could Hit 8.1 Percent By December - Economist

Inflation in South Africa could peak at 8.1% in December this year and only dip below the SA Reserve Bank's upper target… Read more »

Copyright © 2016 News24Wire. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 1,200 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.