sarb thumb medium60 101Bloomberg News reports that according to the SA Reserve Bank (SARB), South Africa faces the prospect of a prolonged breach of the 3% to 6% consumer inflation target, even as growth is slowing.  

The main reasons for the elevated inflation forecast “are the direct and indirect effects of both higher food prices and exchange-rate depreciation,” the SARB said in a report released on Monday.  The bank indicated that inflation expectations over the long run were “at or above the top end of the inflation target range.”  Consumer inflation accelerated to 7% in February and the SARB forecasts it will only return to its 3% to 6% target band in the final quarter of 2017.  The bank’s Monetary Policy Committee (MPC) has raised the benchmark rate four times since July to 7%, even as it cut its economic growth forecast for the year to 0.8%, which will be the slowest pace since 2009.

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