Statistics South Africa in Pretoria reported on Wednesday that annual inflation reached 4.5% in September, a notch higher than August's 4.4% but shy of the 4.7% median from a Bloomberg survey of 17 economists.
Energy prices have climbed as conflicts in Ukraine and the Middle East squeezed supplies, pushing fuel to a record this month and setting up another increase in November. Food prices may come under added strain, with a super El Niño increasing drought risks and ongoing wars in Ukraine and Iran disrupting fertilizer supplies.
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South African Reserve Bank Governor Lesetja Kganyago has often emphasized that policymakers are intent on steering inflation back to their 3% goal, following last month's quarter-point hike to 7.25%. The bank likened its stance to firefighting - extinguish flare-ups quickly so they do not spread - and named preventing the current surge from becoming entrenched as the top priority, saying it would "act decisively to prevent that from happening." Traders' forward-rate agreements, a tool for wagering on future borrowing costs, currently imply two additional rate increases over the next year.
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