South African inflation falls for third consecutive month

For the third consecutive month South African inflation slowed in November to an annual 12.1 percent.

This has meant that analysts are expecting the central bank to take the opportunity for action and lower interest rates by as much as 3 percent next year.

Statistics South Africa published the latest data on their website and the CPIX inflation rate, which does not include mortgage costs, fell from 12.4 percent and this has been backed up by economists predictions who indicated inflation would slow to 11.8 percent.

Carmen Altenkirch, an economist at Nedbank Group Ltd which is South Africa’s fourth-largest bank, has said that that the figures were higher than expected although this does not detract from the fact that interest rates need to be lower next year.

On December 11th, the Reserve Bank cut its benchmark interest to 11.5 percent which was the first reduction for more than three years and so more action is expected in order overcome the economic slump.

The rand has slumped to 9.945 against the dollar from 9.9551 before the data was released, whilst the yield on the R153 government bond, has fallen by 3 percent to 7.2 percent.

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