{"id":25743,"date":"2013-11-27T16:25:50","date_gmt":"2013-11-27T14:25:50","guid":{"rendered":"http:\/\/www.myza.co.za\/2013\/11\/reserve-bank-to-focus-on-core-cpi\/"},"modified":"2013-11-27T16:25:50","modified_gmt":"2013-11-27T14:25:50","slug":"reserve-bank-to-focus-on-core-cpi","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/reserve-bank-to-focus-on-core-cpi\/","title":{"rendered":"Reserve Bank to focus on core CPI"},"content":{"rendered":"

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The Reserve Bank is to pay close attention to core inflation, so as to assess the effect of a weaker rand feeding through to prices in the economy.<\/p>\n

In its Monetary Policy Review (MPR) released on Tuesday, the central bank said the core inflation rate \u201chas tracked higher and is the focus of heightened scrutiny\u201d.<\/p>\n

Core inflation excludes energy and food costs.<\/p>\n

\u201cStronger second-round effects from depreciation and sharp increases in unit labour costs would have significant and negative effects on the inflation outlook,\u201d said the bank.<\/p>\n

The MPR is published bi-annually. It reviews domestic and international developments that have affected inflation and that impact on the monetary policy stance. It also provides an assessment of the factors determining inflation.<\/p>\n

The depreciation of the rand continued to be the main upside risk to the country\u2019s inflation outlook.<\/p>\n

\u201cRand depreciation continues to be the main upside risk to the domestic inflation outlook, although the pass-through from currency movements to headline inflation has proven to be relatively muted since the onset of sustained depreciation in May 2011,\u201d noted the MPR.<\/p>\n

At its last Monetary Policy Committee (MPC) meeting of the year last week, the central bank kept the repo rate unchanged at 5%. The bank forecasts that inflation will remain within the 3% to 6% target range.<\/p>\n

\u201cA significant deterioration in the risks to the medium term inflation outlook may necessitate appropriate action to anchor inflation expectations,\u201d said the bank in the MPR. \u2013 SAnews.gov.za<\/p>\n

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