"South African headline inflation slows to 13-month low in May 2023"

" South African headline inflation slows to 13-month low in May 2023 \r\n\r\nSouth African inflation slowed more than projected to a 13 month-low in May, easing pressure on the central bank to continue raising interest rates.\r\n\r\nThe annual inflation rate was 6.3%, down from 6.8% in April, according to a report released by the statistics office on Wednesday. The median estimate of 13 economists in a Bloomberg survey was 6.5%. Prices rose 0.1% in the month.\r\n\r\nForward-rate agreements starting in a month \u2014 used to speculate on borrowing costs \u2014 show traders are still pricing in a more than 50% chance of the monetary policy committee increasing the repurchase rate by 25 basis points when it gives its next decision on July 20.\r\n\r\nThe panel has raised rates at 10 successive meetings with the aim of bringing inflation back to the 4.5% midpoint of the South African Reserve Bank\u2019s target range, where it prefers to anchor expectations. The key interest rate stands at 8.25%, the highest level in 14 years.\r\n\r\n\u201cInflation is now within sight of the upper end of the inflation target, and will see a further slowing,\u201d Razia Khan, Standard Chartered Bank\u2019s chief economist for Africa and the Middle East, said in an emailed note. \u201cNo further SARB hikes appear to be required in this cycle.\u201d\r\n\r\nThe MPC raised the repurchase rate by 50 basis points last month. While Governor Lesetja Kganyago said monetary policy had become restrictive, the panel wouldn\u2019t ease borrowing costs \u201cuntil the inflation trajectory changes and inflation moves toward the midpoint of the inflation target range on a forward-looking basis.\u201d\r\n\r\nThe rand was 0.3% stronger at 18.3237 per dollar at 10:37 a.m. in Johannesburg, while yields on 2026 government bonds dropped 11 basis points to 9.44%.\r\n\r\nCore price growth, which excludes the cost of food, non-alcoholic drinks, fuel and electricity, cooled to 5.2% in May from 5.3% the month before."

"South African headline inflation slows to 13-month low in May 2023"

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