Four-year CPI low promises further South African rates cut

By bne IntelliNews September 30, 2010
South Africas CPI slowed alittle more than expected to a fresh four-year low in August, leaving the dooropen for another interest rate cut. Statistics South Africa reported consumerinflation slowed to 3.5% year-on-year in August from 3.7% in July, a touchlower than forecasts of 3.6%. The reading was the lowest since April 2006, itwas reported. The South African Reserve Bank expects inflation to remain withinits 3-6% target range until the end of 2012. The central bank cut the repo rateby 50 basis points to 6.0% early in September, bringing rate reductions sinceDecember 2008 to 600 basis points. In its September statement, the MonetaryPolicy Committee said there was limited room for further easing, though itwould assess developments continually.

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