Consumer-price growth slowed to 3.7% compared with 4.1% in September, Pretoria-based Statistics South Africa said Wednesday in a statement on its website. The latest print marks 31 consecutive months in which inflation has remained within the central bank’s target band of 3% to 6%. The median estimate of 14 economists in a Bloomberg survey was 3.9%.The slowdown in inflation may provide the central bank with room to cut its benchmark interest rate on Thursday.
While the MPC has faced calls to ease policy to boost an economy that is forecast to expand just 0.5% this year, its modeling shows a 25 basis-point cut point will only increase economic growth by 0.1 percentage point a year later. A deteriorating fiscal outlook and political and policy uncertaintyAnnual core inflation, which excludes the prices of food, non-alcoholic drinks, fuel and electricity, was unchanged at 4%.The rand declined as much as 0.7% against the greenback and was 0.
Forward-rate agreements starting in one month, used to speculate on borrowing costs, dropped and are now pricing in a 40% chance of a 25 basis-point rate cut.