South Africa’s consumer price inflation is in check but it’s too soon for the central bank to declare victory to use pursuit to anchor inflation expectations nearer to the midpoint with the 3-6% target range, Governor Lesetja Kganyago said.
South Africa’s CPI slowed to a few.8% in March, the best figure since January 2011, because end on the worst drought in decades helped push down food prices.
In a speech posted for the South African Reserve Bank (Sarb) website on Wednesday, Kganyago said the benign inflation environment has not been supposed to continue because expectation was the March reading was the bottom reason for the latest cycle.
“Inflation seems to be in order, but one can find incipient risks,” Kganyago said.
He said the Sarb must see further declines in CPI, or perhaps a stabilisation at recent levels, to feel certain that inflation expectations have fallen on a sustained basis.
“Quite simply, its ahead of time to declare victory within our pursuit for anchor inflation expectations nearer to the midpoint within the target range,” Kganyago said.
The central bank cut its main rate of interest by 25 basis-points in order to six.5%? in March within the back of easing inflation but revealed that it expected consumer prices to go up above 5% in the medium term.
The next rates decision will probably be announced on May 24.?