Lesetya Kganyago, Governor of the South African Reserve Bank.Photo: Tebogo Letsie
The South African Reserve Bank has developed two new indicators to better understand underlying price pressures, and both are now showing an increase in their readings.
The supercore index and a measure called the “persistent and common component of inflation” will be used alongside headline and core inflation rates published by Statistics South Africa as additional tools to inform monetary policy, the SARB said. 's bi-annual monetary policy editor Simbanegabi Witness said. review.
The PCCI is higher than core inflation (4.9% last month), which primarily reflects below-average post-pandemic housing and medical aid inflation, the study said. Supercore indicators also show that inflation pressures are increasing as the economy recovers from the COVID-19 pandemic, with results in recent months remaining just above the target midpoint.
According to the report, risks to underlying inflation include expectations for rising prices, normalization of inflation in health insurance and rental housing, and a weaker currency.
South Africa's inflation rate has been above 4.5% since May 2021, the midpoint of the target range on which the central bank prefers to anchor expectations. MPC has kept its base interest rate unchanged at 8.25% since May in order to return to its target.
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