We all witnessed another significant increase in petrol prices earlier this week, and while South Africa’s food price inflation is coming off a low base as a result of previous bumper maize crops and a favourable exchange rate, Producer Price Inflation (PPI) numbers show rising trends for both agricultural and manufactured food prices. This situation will require careful monitoring going forward.
The MPC is committed to achieving the inflation target within the parameters of its mandate. However, given that inflationary pressures are currently seen to be mainly of a cost–push nature and not demand-driven, any future policy action and its timing will be based on the MPC’s assessment of any second-round impacts.