South African producer-price inflation slowed for a fifth straight month in March, easing pressure on the central bank to raise its benchmark lending rate next month.
The cost of goods leaving factories and mines in Africa’s biggest economy increased 7.2 percent, compared with 8.3 percent in February, Pretoria-based Statistics South Africa said on its website today. The median estimate of 13 economists surveyed by Bloomberg was 8 percent. Prices fell 0.1 percent in the month.
“You may see a softer rhetoric on inflation coming from the South African Reserve Bank” at the next Monetary Policy Committee meeting, Gina Schoeman, an economist at Absa Group Ltd. said in a telephone interview from Johannesburg today. “This just eases the pressure on the Reserve Bank to do anything soon.”
The central bank has kept its key policy rate unchanged at 5.5 percent, the lowest level in more three decades, since November 2010 to help stimulate the economy. Consumer-price inflation slowed to 6 percent in March, the top end of the bank’s 3 percent to 6 percent target, adding to expectations rates will remain unchanged this year.
The price of white corn, a staple food in South Africa, fell 4 percent in March on the South African Futures Exchange, while oil declined 3.8 percent in New York.
Consumer inflation will probably peak at 6.5 percent this quarter before falling back into the target band by the end of the year, Reserve Bank Governor Gill Marcus said on March 29.
The rand weakened 0.2 percent to 7.7621 a dollar at 12:15 p.m. in Johannesburg. The currency was at 7.7558 before the data was released. The yield on the rand bond due in 2015 dropped six basis points, or 0.06 percentage point, to 6.46 percent.