* Headline inflation quickens within expectations
* Inflation could peak higher that cbank’s forecast
(Adds details, background)
JOHANNESBURG Dec 14 (Reuters) – South Africa’s
targeted consumer inflation breached the central bank’s 3-6
percent target in November as expected, complicating the Reserve
Bank’s strategy to keep it in check by raising rates when growth
is expected to be weak.
November consumer inflation quickened to 6.1 percent
year-on-year, from 6.0 percent in October, a level last seen in
January 2010, Statistics South Africa said on Wednesday.
Economists surveyed by Reuters had expected headline
year-on-year inflation to accelerate to 6.2 percent and slow to
0.3 on a monthly basis.
Stats S.A. said headline CPI slowed as expected to 0.3
percent on a month on month basis, from 0.5 percent in October.
A weak rand was is driving prices higher and could push
prices above the central bank’s projected peak of 6.3 percent.
“If the rand weakens then forecasts will rise across the
board,” said Carmen Altenkirch, an economist at Nedbank, adding
the Reserve Bank will not necessarily raise rates in response.
“The Reserve Bank will continue having to juggle very weak
growth against rising inflation and as long as inflation is
driven by external factors and there’s limited evidence of
second-round effects, they will probably keep interest rates low
for longer. We’ve revised our interest rate rise to November
from July.”
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