South Africa's headline inflation rate inches higher in August
South African inflation picked up slightly in August, but analysts said the smaller-than-expected uptick was unlikely to influence the central bank's interest-rate announcement later in the day.
Headline inflation was at 4.4% year-on-year, up from 4.3% in July but below the average forecast of 4.5% in a Reuters poll of economists, Statistics South Africa data showed on Wednesday.
Most economists expect the South African Reserve Bank to increase its monetary policy rate by 25 basis points to 7.25% in a decision due around 3 pm local time.
The central bank, which targets inflation of 3%, tends to focus on the outlook for upcoming inflation readings rather than looking backwards.
"This has no impact on the MPC (Monetary Policy Committee) decision that we will hear later today. The MPC concluded its forecasting and modelling runs last week already," said Johann Els, chief economist at PSG Financial Services.
Statistics South Africa said the inflation increase was mainly driven by the housing and utilities, transport, and insurance and financial services categories.
Food and non-alcoholic beverages inflation was among the lowest categories at 1.1%, with analysts saying strong crop production should help keep food price pressures contained despite risks from an anticipated El Nino weather event.
Annual core inflation, which strips out volatile items like food and energy, eased to 4.1% in August, slightly below economists' forecast of 4.2%.
South Africa's central bank surprised investors and economists by keeping rates unchanged in July, saying its policy stance was restrictive enough to return inflation to target within two years.
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