South Africa

South Africa’s inflation increases

South Africa’s inflation quickened for the first time in three months on the eve of a widely expected interest-rate hike.

The headline consumer-price index rose 7.6% from a year earlier, compared with 7.5% in September, Pretoria-based Statistics South Africa said Wednesday in a statement on its website. The median of 15 estimates in a Bloomberg survey of economists was 7.4%.

The South African Reserve Bank officially targets price growth in a band of 3% to 6% though its monetary policy committee prefers to anchor expectations close to the midpoint of that range.

Stubbornly high inflation that’s remained above the target ceiling for six straight months will probably see the MPC raise the benchmark in its final meeting of the year Thursday.

Economists and traders are split on the quantum. The median of 20 economists’ estimates in a Bloomberg survey is for a hike of three-quarters of a percentage point, with projections for an increase ranging from 50 to 100 basis points.

Forward-rate agreements starting in one month used to speculate on borrowing costs, showing the market is pricing in a half-point increase.

The MPC has front-loaded projected tightening in its fight against inflation, raising the key rate by a cumulative 275 basis points since last November to 6.25%.


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