South African Inflation Improves in November

• South African Inflation Improves in November

South Africa’s inflation rate improved for a second consecutive month in November following a better than expected food index figure that climbed at the slowest pace in two years.

The Consumer price index, which measures inflation rate in the second largest economy in Africa climbed to 4.6 percent from 4.8 percent in October, the Statistics South Africa reported on Wednesday. Economists had predicted 4.7 percent.

Gauge of food prices rose 5.2 percent year-on-year, according to the report.  The slowest pace since November 2015 and better than the 5.3 percent recorded in October.

Also, core inflation rate, excluding energy and food prices improved to 4.4 percent in November, down from 4.5 percent recorded in October. Again, the slowest pace in 5 years.

This means price growth has now been within the central bank’s target range of 3 percent to 6 percent for eight consecutive months, the longest run in 2 years. The central bank led Monetary Policy Committee was forced to reduced benchmark rate for the first time in five years in July when the economy plunged into recession due to political uncertainties and lower global commodity prices.

The rand gained 0.3 percent against the U.S. dollar to 13.6397 as of 10:04 a.m. Johannesburg. While yield on rand-denominated government bonds due in December 2026 were unchanged at 9.27 percent.

The rand strengthened 0.3 percent to 13.6397 per dollar by 10:04 a.m. in Johannesburg on Wednesday. Yields on rand-denominated government bonds due December 2026 were unchanged at 9.27 percent.