(Adds details, background)
* Inflation seen in target to end-2014
* Falls in rand pose main upside risk to inflation
* Bank continues to build reserves to aid FX stability
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.
“The global environment continues to provide an uncertain,
unstable and risky backdrop against which price and financial
stability in the domestic economy have to be maintained,”
Governor Gill Marcus said in a statement accompanying the
The Reserve Bank has kept its repo rate unchanged at 5.5
percent since November 2010 to try and boost economic growth,
which it now sees at 2.9 percent in 2012 from an earlier
forecast of 3.0 percent.
The Treasury sees growth at 2.7 percent this year.