The slowdown in the consumer price index lowers the pressure for a restrictive monetary policy.

Headline inflation fell to 6.3% in South Africa in May, down from 6.8% in April, reaching its lowest level since April 2022, according to data released on Wednesday, June 21 by the South African statistics agency Stats SA.

This slowdown in the annual rise in the consumer price index (CPI) lowers the pressure for a restrictive monetary policy with the central bank continuing to raise key rates.  The South African Reserve Bank has already raised its key rate ten times successively, to bring inflation down to 4.5%, the midpoint of its target range (3% to 6%).

"Inflation is now within sight of the upper end of the inflation target, and will see a further slowing," said Razia Khan, chief economist at British bank Standard Chartered Bank for Africa and the Middle East, quoted by Bloomberg.

Last May, South African Central Bank Governor Lesetja Kganyago said that monetary policy would remain restrictive "until the inflation trajectory changes and inflation moves toward the midpoint of the inflation target range."