JOHANNESBURG, Mar 18 – South Africa’s inflation rate eased in February, but policymakers are expected to maintain a cautious stance on interest rates as global uncertainties intensify.
Data from Statistics South Africa showed that consumer prices rose 3% year-on-year in February, down from 3.5% recorded in January.
Despite the slowdown, the South African Reserve Bank is unlikely to interpret the data as sufficient grounds to cut interest rates at its upcoming policy meeting.
The central bank currently targets inflation at around 3% and is widely expected to keep its benchmark interest rate unchanged at 6.75% when policymakers meet on March 26.
The cautious outlook reflects growing concerns about the global economic environment, particularly following the escalation of conflict involving the United States, Israel and Iran.
The conflict, which began on February 28, has driven a sharp rise in global oil prices, raising concerns about renewed inflationary pressures.
As a net importer of crude oil, South Africa is particularly exposed to higher energy costs, which could feed into domestic inflation through fuel and transportation prices.
Policymakers are therefore expected to prioritise stability and assess the broader economic impact of geopolitical developments before making any adjustments to monetary policy.
The latest data suggests that while inflation is currently under control, external risks could complicate the central bank’s policy path in the months ahead.
