* March inflation eases back to c.bank target range
* Strong rand should support lower inflation
* Retail sales jump in Feb
(Adds background, retail sales)
By Xola Potelwa
JOHANNESBURG, April 18 (Reuters) – South Africa’s headline
inflation slowed in March to within the central bank’s target
range for the first time in four months, suggesting inflation
may undercut the bank’s forecasts and ease pressure for action
in the form of an interest rate rise.
The fall was in line with expectations. However, retail
sales showed a surprise jump, with 7.2 percent annual growth in
February, suggesting strong activity on the high street in
Africa’s biggest economy.
Most economists expect the central bank’s next rate move to
be up as it seeks to contain inflation, but those expectations
are going to be pushed back if price pressures continue to trend
lower.
Annual inflation braked to 6 percent in the last month of
the first quarter, from 6.1 percent in February.
The move back to the Reserve Bank’s 3-6 percent band means
inflation may now peak beneath the 6.5 percent the bank has
predicted for the second quarter of this year.
Continued…
