S.A's inflation back in target, at 3-yr low

The easing to 5.7 percent year-on-year, a more than three-year low, from January's 6.2 percent suggests price pressures are cooling although month-on-month inflation quickened. Statistics South Africa said headline CPI stood at 0.6 percent on a monthly basis in February versus January's 0.3 percent. The retreat into the band comes a month ahead of the Reserve Bank's forecast and further easing could add to chances of a rate cut but some investors had looked for a faster dip than Wednesday's numbers showed. "I don't think at this point in time (there will be) a rate cut just yet but should inflation continue surprising to the downside in the months ahead, another rate cut is still possible," George Glynos, managing director of market analysts ETM, said.

Analysts said inflation may surprise on the downside over the next few months, making more policy loosening possible later this year, should the central bank decide to hold the repo rate at 7 percent at its two-day policy meeting ending today.