Futures Market News
Rand falls as inflation climbs in South Africa
Oct 24, 2012 10:20 AM
The value of the monetary unit of the African continent's largest economy slipped Wednesday in the aftermath of economic data indicating the nation's inflation rate increased more than forecast last month, Bloomberg reports.
The Reserve Bank of South Africa is now facing decreased space and opportunity to spur its economy. Inflation pushed to 5.5 percent during the month of September after having checked in at 5 percent during the month prior, the nation's statistics office said.
"With everyone thinking that further stimulus for South Africa could only come in the form of further Reserve Bank easing, this inflation print is very significant," states an email to Bloomberg penned by Africa economic research head Razia Khan with Standard Chartered. "This will make for uncomfortable reading for the Reserve Bank, given currency-related risks that must now be factored in as well."
The central bank of South Africa is aiming to preserve inflation at a range from 3 percent to 6 percent.
Reuters reports Finance Minister Pravin Gordhan is tasked with controlling the budget deficit but also addressing demands for more social spending, per the demands of the active population he serves.
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