“South African inflation slowed to a five-month low in January after the statistics office adjusted the consumer price basket and food and fuel prices eased.
The inflation rate fell to 5.4 percent from 5.7 percent in December, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of 19 economists was 5.7 percent. Prices rose 0.3 percent in the month.
The government cut the price of gasoline by 1.2 percent in January as a stronger rand in the previous month helped to curb import costs. Since then, the currency has plunged 4.8 percent against the dollar and fuel prices climbed, adding to pressure on inflation.
“All indications are that this is not going to last and the overall trajectory is still upward,” George Glynos, an economist at Econometrix Treasury Management, said in a phone interview from Johannesburg.
The rand strengthened after the release of the data, advancing 0.2 percent to 8.8371 against the dollar by 11:11 a.m. in Johannesburg. Investors pared back expectations of higher interest rates, with the yield on forward-rate agreements due as soon as six months dropping 5 basis points to 5.03 percent.
