South Africa Inflation Rate Drops to 2.8%

South Africa's annual inflation rate dropped to 2.8% in October, down from 3.8% in September, marking the lowest rate since June 2020. The decline was primarily driven by falling fuel prices, which saw a significant decrease of more than R1/l. This reading is below the South African Reserve Bank's (SARB) target range of 3-6%, bolstering expectations for a rate cut at the upcoming monetary policy meeting. Economists had predicted a smaller decline to 3.1%, indicating a more favorable economic outlook. The SARB is anticipated to lower its repo rate by 25 basis points, mirroring the cut made in September. This shift in inflation dynamics is expected to influence monetary policy as the central bank assesses market conditions.