Economics
S. Africa Reserve Bank Says Too Early to Claim Inflation Win
- Regulator uncomfortable with expectations close to 6%
- Inflation rate closer to 4.5% would boost competitiveness
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South Africa’s central bank says it’s premature to claim victory in the war against inflation and sees price growth stabilizing at 4.5 percent only by the end of 2021.
While inflation has been inside the central bank’s target band of 3 percent to 6 percent for two years and was at the midpoint of this range in March, it’s “too early to claim that inflation is already permanently lower,” the South African Reserve Bank said in its Monetary Policy Review published Wednesday in the capital, Pretoria. The improved outcomes were mainly due to positive surprises such as low food-price growth and a stable exchange rate, the central bank said. The rand has appreciated 2.3 percent against the dollar this year.