The South African Reserve Bank left interest rates unchanged at 5.75%. "The lower inflation path gives us some room to pause in this process (hiking rates)," Bank governor Lesetja Kganyago said. As the country benefits from a low oil price, rates are widely expected to be kept on hold for the year. The Reserve Bank now expects consumer inflation to average 3.8% this year, compared with the 5.3% forecast previously, and to remain within the 3%-6% target band for the next two years.
Local Producer price inflation slowed to 5.8% last month from 6.5% in November. Slowing international oil, food and agricultural crop prices are the main reason for the improvement in SA’s inflation outlook.
South Africa's private sector credit demand grew 8.52% year-on-year in December, down from 9.13% in November. This was slightly below the 9.3% expected figure and once again illustrates the challenging environment within the economy.
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