The South African Reserve Bank targets inflation of between 3% and 6%.
South Africa’s central bank’s Monetary Policy Committee (MPC) raised rates by a smaller than forecast 25 basis points in January as it lowered its economic growth forecasts over the crippling power cuts.
The bank, which has raised interest rates at its last eight monetary policy meetings to tame inflation, said inflation is expected to sustainably fall to the midpoint of its target range by the fourth quarter of 2024.
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“So long as renewed fears about the global banking system do not flare up, the Reserve Bank will almost certainly press ahead with a final 25 basis points interest rate hike at next week’s MPC meeting,” the note added.
Market focus will be on the U.S. Federal Reserve’s policy meeting, which will end later in the day, with investors awaiting clarity on the path the U.S. central bank could take in the wake of a global banking turmoil.
Core inflation, which excludes prices of food, non-alcoholic beverages, fuel and energy, was at 5.2% year on year in February, from 4.9% the previous month.
On a month-on-month basis core inflation was at 0.8% in February, compared to 0.2% in January.
