South African consumer prices increased by 5.1% in June compared with a year earlier, continuing a trend of easing inflation and adding to pressure on the central bank to cut interest rates.
The reading–the third in a row in which inflation remained within the South African Reserve Bank’s 3% to 6% target range–comes just a day before the bank announces its decision on whether to reduce its main repo rate from the current 7%. In May, consumer prices were up 5.4% from a year earlier.
However, most analysts still expect the bank to stay put, pointing to comments from SARB officials that inflation needed to stabilize for a sustained period of time.
The decline in annual inflation rate in June reflected smaller price increases for clothing and footwear, transport and well as restaurants and hotels, South Africa’s statistics office said.