South African inflation picks up to 3.1% y/y in March, as expected

Source: Reuters.

The slight increase was in line with the median forecast in a Reuters poll of economists, as the effects of the US-Israel war against Iran were only starting to filter through into prices last month.

Inflation is set to accelerate much faster in April, when domestic fuel prices surged despite the government temporarily reducing a fuel levy to try to mitigate the impact of the Middle East conflict.

South Africa's central bank left its policy rate unchanged at 6.75% at a meeting in late March, saying caution was needed.

The bank targets inflation of 3% with a 1 percentage point tolerance band either side.

In month-on-month terms inflation was at 0.6% in March, compared with 0.4% in February.