Interest rate hike coming for South Africa as inflation rises

South Africa’s annual inflation rate rose slightly less than expected ahead of a widely expected interest-rate hike.

Consumer prices increased to 4.4% in August from 4.3% a month earlier, Statistics South Africa said in a statement on its website on Wednesday.

The median estimate of 18 economists in a Bloomberg survey was 4.5%. 

Most economists in a separate Bloomberg poll see the central bank raising interest rates to 7.25% from 7% when Governor Lesetja Kganyago delivers the decision at 15:00.

The conflicts continue to restrict supplies of energy, grain and fertiliser.

Brent crude is trading at around $99 per barrel, compared with an average of around $85 per barrel when South Africa last deliberated on interest rates.

Separately, El Niño weather patterns could hurt agricultural production, impacting food inflation.