South African inflation accelerated to the highest level in 10 months in July, driven by increased fuel prices.
The price of gasoline was 25 percent higher in July than a year earlier and rose to an all-time high in August as the rand weakened.
Consumer prices rose 5.1 percent from a year earlier compared with 4.6 percent in June, Pretoria-based Statistics South Africa said Wednesday in a statement on its website.
Headline consumer inflation quickened to 5.1 percent year-on-year in July from 4.6 percent in June, and rose to 0.8 percent from 0.4 percent on a monthly basis, Statistics South Africa said on Wednesday.
The figure was a touch above expectations of 5 percent annual increase, pushing the rand to 14.4400 from 14.3900, but analysts said investors and the central bank would be more concerned with core inflation than the headline figure.
The rand fell more than 10 percent last week to a 2-year low as the Turkish crisis turned investors off emerging markets.
The currency has since recovered as the yield offered by local assets, with benchmark bonds yielding around 9 percent, offering an attractive carry-trade.
Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, rose to 4.3 percent year-on-year from 4.2 percent, while on a month-on-month basis it increased to 0.6 percent from 0.2 percent previously.
“The risk of higher rates has increased due to the weaker currency, but that is only going to start showing up in inflation in 12 to 18 months, so we don’t see the bank raising rates this year,” said economist at Nedbank Busisiwe Radebe.