South Africa's inflation up at 4.8% in November
By Money Times
Dec 10, 2015 10:24 AM EST
Dec 10, 2015 10:24 AM EST
Falling in line with the economists' forecast, the inflation rate in South Africa rose to 4.8 percent in November, registering its highest since July 2015.
Consumer prices marginally rose 0.1 percent during the month. South Africa's currency Rand fell against US dollar, euro and pound. The currency depreciation is likely to be a major risk to the inflation outlook.
Narrowing missing a second recession in six years during the third quarter, South Africa's economy may witness recovery but slowest pace since 2009.
The South Africa's central bank governor Lesetja Kganyago has a tough task to deal with the slow pace of economic recovery. South Africa is one among the BRICS (Brazil, Russia, India, China and South Africa).
The median of 22 economist forecast in a survey carried out by Bloomberg, the inflation rate in tandem with the predictions. The Reserve Bank of South Africa has been raising interest rates in more gradual manner. So far, it raised interest rate 1.25 percentage points to 6.25 percent during the past two years.
The rand's fall to a record low against the US dollar is also further causing to inflation rise. According to the Central Bank of South Africa, the inflation rate may reach the target band of three percent and six percent in the first and fourth quarters in 2016. The currency depreciation is representing a risk for price growth.
According to a report published by Nasdaq, justifying the interest rate hike by South Africa, the inflation rate further moved up in December. Africa's most developed nation South Africa's economy was up 4.8 percent in December from 4.7 percent in November.
Economists also predicted the rise in economy growth. The Central Bank of South Africa is keen to protect its currency, Rand.
The South Africa's Rand eased 0.1 percent to 14.6073 per dollar. Rand fell against the US dollar 21 percent so far this year. The yields on rand-denominated bonds are due in December 2026 dropped two basis points to 8.80 percent.
Trading Economics published data revealing that the cost of household rose at the fastest pace while transport prices remained at previous levels. The inflation rate in South Africa was an average rate of 9.31 percent during 1968-2015.
It touched an all-time high of 20.90 percent in January 1986 and record low of 0.20 percent in January 2004, according to Statistics South Africa.
Core inflation excluding food, non-alcoholic beverages, gasoline and electricity costs, slowed down to 5.1 percent in November. It's the lowest inflation since August 2013.
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