PRETORIA, July 4 (Reuters) – South African inflation is
expected to remain within its 3-6 percent target range on a
sustained basis to the end of 2014, with the main upside risk
coming from falls in the rand due to investor risk aversion, the
Reserve Bank said on Wednesday.
In its 2011/12 annual report, the central bank reiterated
that the domestic growth outlook had deteriorated mainly due to
global uncertainties, saying it had trimmed its forecasts.
While oil was previously seen as the main upside risk to the
inflation outlook, the depreciation of the rand in response to
global risk aversion had more recently become the main upside
risk, it added.
The local banking system remained stable and well
capitalized, it said, despite the liquidity problems facing some
European countries. South African banks also had minimal
exposure to peripheral euro zone economies, it added.
The bank said it was continuing a policy of building
reserves to try to bring greater stability to the foreign
exchange market and had purchased approximately $4 billion of
foreign exchange in the financial year under review.
(Reporting by Stella Mapenzauswa; Editing by Ed Cropley)
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Article source: http://feeds.reuters.com/~r/reuters/AfricaSouthAfricaNews/~3/-w_BQz7Xd-w/idAFJ8E7JB00J20120704
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