Inflation in South Africa has exceeded the upper limit of the inflation target range since April 2007. In response to this, the monetary policy stance has been tightened, and between June 2006 and June 2008 the repurchase rate was increased by a cumulative 500 basis points.
The most recent measure, published yesterday, showed that CPIX inflation declined to 12,4 per cent in October compared to the recent peak of 13,6 per cent seen in August. We are hopeful that this is the start of a consistent downward trend. Currently our forecasts indicate that we should be back in the target range by the second quarter of 2010.