South African August Inflation Unexpectedly Quickens to 6.4%

South Africa’s inflation rate unexpectedly rose to 6.4 percent in August, exceeding the central bank’s target for a fifth month.

Inflation accelerated from 6.3 percent in July, the Pretoria-based statistics office said on its website today. The median estimate of 28 economists surveyed by Bloomberg was 6.2 percent. Prices rose 0.4 percent in the month.

The Reserve Bank will probably keep its benchmark repurchase rate unchanged at 5.75 percent tomorrow, according to 17 of the 24 economists surveyed by Bloomberg. The economy is forecast to expand at the slowest pace this year since the 2009 recession after labor strikes forced mines and factories to temporarily halt operations. Inflation expectations remain anchored, the bank said in its Quarterly Bulletin last week.

“While today’s number is somewhat higher than expected, it does not change the bigger picture that the Reserve Bank will look at when deciding on interest rates,” Elize Kruger, an economist at KADD Capital, said by phone from Johannesburg. “Inflation has already peaked.”

The rand has lost 3.2 percent against the dollar in the past month, taking its decline since the start of 2013 to 22 percent, the most among 16 major currencies tracked by Bloomberg.

The currency fell 0.3 percent to 10.9326 per dollar by 11:40 a.m. in Johannesburg. The yield on benchmark government bonds due December 2026 fell one basis point to 8.24 percent. Forward rate agreements starting in one month, used to speculate on borrowing costs, rose three basis points to 6.29 percent.

The core inflation rate, which excludes food, non-alcoholic beverages, gasoline and electricity costs, rose to 5.8 percent in August, the highest in more than four years, from 5.7 percent in the previous month.

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