In its just-released Consumer Price Index Statistical Report, the South African Reserve Bank noted that the inflation rate in the country eased by 0.9% points to 5.4% in June 2023, from the 6.3% inflation rate that was recorded in May 2023.
The performance was on the bank on the slowdown of food and non-alcoholic beverages to 11.0% from the 14.0% recorded in May 2023, attributable to the prices of oil and fats decreasing by 9.5% for the 12 months ending in June 2023. Additionally, the inflation rate for Transport dropped to 1.8% from 7.6% recorded in May 2023 owing to the 8.3% decline in fuel prices in June 2023 compared to a similar period last year.
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This marks the first time since April 2022 that the inflation rate in the country has been within the central bank’s target range of between 3.0% and 6.0%. The inflation rate has been steadily declining since March 2023, when it peaked at 7.1%.
On May 20, 2023, the Monetary Policy Committee (MPC) met and decided to raise the Repurchase Rate (Repo) by 50 basis points to 8.25%, up from 7.75%.
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“The policy stance aims to anchor inflation expectations more firmly around the mid-point of the target band and to increase confidence in attaining the inflation target sustainably over time,” said the MPC committee.
Notably, it has increased the Repo rate by 475 bps since November 2021 in an effort to bring down the inflation rate to the target range.
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