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South African inflation eased in January, edging closer to the central bank\u2019s 3% target, bolstering the case for an interest-rate cut when policymakers meet next month.<\/p>\n
Read: Would a 3% inflation target push interest rates higher?<\/p>\n
Consumer prices rose 3.5% year on year, compared with 3.6% a month earlier, Pretoria-based Statistics South Africa said in a statement on its website on Wednesday. The median estimate of 15 economists in a Bloomberg survey was 3.4%.<\/p>\n
Read: SA back from the brink, now for the hard part \u2013 Hendrik du Toit<\/p>\n
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The outcome may encourage the central bank\u2019s monetary policy committee to lower borrowing costs on 26 March. The MPC left the benchmark rate unchanged at 6.75% last month because of concerns about global uncertainty and the risk that higher food and electricity prices may derail its revised 2026 inflation forecast of 3.3%.<\/p>\n
Read: Sarb errs on the side of caution, holds rates steady<\/p>\n
Meat prices have surged and are likely to remain elevated in the near term as South Africa battles an outbreak of foot-and-mouth disease in cattle, said Paul Makube, a senior agricultural economist at FirstRand\u2019s First National Bank.<\/p>\n
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Read: Gold regains ground after two-day drop in thin holiday trading<\/p>\n
Of the 14 economists surveyed by Bloomberg this month, a majority expect policymakers to lower borrowing costs next month by 25 basis points. Bolstering that view is the rand\u2019s more than 3.7% gain against the dollar this year as gold and platinum \u2014 key exports \u2014 have rallied. In addition, oil prices are averaging about $61 a barrel, $4 less than the central bank\u2019s 2026 assumption.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
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