The 4.9% was broadly in line with economists’ expectations and comes ahead of the interest rate decision by Sarb’s Monetary Policy Committee (MPC) meeting on Thursday. The MPC is seen holding its repo rate steady at 3.5% and inflation remains well within its mandated 3% to 6% target range.
Demand pressures remain weak in an economy with a jobless rate over 40% based on its widest definition. And inflation is seen moderating further this year.
“In line with our expectations, headline inflation has started slowing, reflecting diminishing base effects that affected April and May outcomes. We expect headline inflation to trend even lower for the remainder of this year – ending 2021 closer to the 4.5% midpoint of Sarb’s 3% to 6% inflation target range,” FNB economist Koketso Mano said in a note on the data.
CPI inflation edges lower in June moneyweb.co.za - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from moneyweb.co.za Daily Mail and Mail on Sunday newspapers.
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S&P and Fitch affirm SAâs sovereign credit rating and outlooks
National Treasury says it âacknowledges the pressures the countryâs credit ratings face and remains committed to addressing themâ. 08:16
Image: Dwayne Senior/Bloomberg
S&P Global and Fitch Ratings affirmed South Africaâs long-term sovereign credit rating on Friday at BB-, which is three notches below investment grade.
While expected, the confirmation will come as somewhat of a relief for National Treasury, which is trying to make headway in getting the country out of âjunkâ status. This, however, is expected to take years.
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The rand is back to around 14/dollar. The last time it was in this territory was January 2020. In April of 2020, as the initial hard month of lockdown was crushing economic activity, it shot past record lows of just over 19/dollar. So the rand, which turned 60 in February, has made quite a comeback. Not bad for a pensioner.
The rand’s rally has a number of positive spin-offs. For one thing, it means domestic interest rates are unlikely to be hiked any time soon. If anything, it gives the South African Reserve Bank (Sarb) cover, if it so chooses, to cut again after it took the chainsaw to rates last year.