Sustained low CPI may spur South Africa rate cuts, Kganyago says

South Africa needs to sustain a low inflation rate to justify a change in the central bank’s monetary policy stance, Governor Lesetja Kganyago said. Consumer-price growth was 4.6% in July, the lowest level in three years. That took the spread between the South African Reserve Bank’s policy benchmark and the annual inflation rate to an 18-year high and fuelled bets that the central bank’s monetary policy committee will start its interest-rate cutting cycle when it meets on Sept. 19. Forward-rate agreements – used to speculate on borrowing costs – are fully pricing in a 25 basis-point reduction in the key rate this month.