South Africa's inflation rate climbed to a four-month high, likely cementing the central bank's resolve to keep borrowing costs on hold when it meets next week.

The consumer price index rose to 5,6 percent in February from a year earlier, compared with 5,3 percent the prior month, Pretoria-based Statistics South Africa said yesterday in a statement on its website. The median of 17 economists' estimates in a Bloomberg survey was 5,5 percent.

The uptick means inflation has moved further away from the 4,5 percent midpoint of the central bank's target range, where it prefers to anchor expectations.

It also comes a day after data showed average inflation expectations for this year and next remain above that midpoint, although they declined slightly from the previous report.

Governor Lesetja Kganyago has repeatedly said that until inflation retreats to 4,5 percent in a sustainable manner and settles there, the central bank will be unwilling to adjust its policy stance.

Analysts polled by Bloomberg predict the governor and his colleagues will leave interest rates at a 15-year-high of 8,25 percent for a fifth straight meeting when they announce their policy decision on March 27.

Yields on government bonds pared an earlier drop. They fell as much as 13 basis points before the data was released. They traded 3 basis points lower from closing levels at 12,08 percent.

Forward-rate agreements starting in a month's time show traders aren't pricing in rate cut and in fact see a less than 10 percent chance of 25 basis-point hike. The first chance traders see of a cut is in July

February's price-growth was largely driven by higher transport costs, housing & utilities and food and non-alcoholic beverages. -- Bloomberg.