Headline consumer inflation came in at 5.2% year on year in May, the same as in April, in line with the forecast of economists polled by Reuters.

The South African Reserve Bank (SARB) wants to see inflation fall to 4.5%, the midpoint of its target band, and has kept its main interest rate at its highest level since 2009 for more than a year to try to achieve that objective.

Inflation has been above 5% for months, and the central bank estimated last month that inflation would only stabilise at 4.5% in the second quarter of 2025.

According to a Reuters poll released on Tuesday, the SARB could wait until November before cutting its repo rate.

Capital Economics Analyst David Omojomolo said the formation of a government of national unity following last month's election could ease the central bank's fiscal concerns, meaning a higher chance of a rate cut before the end of this year.

--Reuters--