Annual consumer price inflation in South Africa has eased to 2.8% in October from 3.8% in September, data by Statistics South Africa showed.

It has been the lowest inflation rate in four years mostly as a result of a drop in fuel prices.

Cost of petrol and diesel plummeted 19.1% year-on-year in October.

In addition, inflation has eased for:

– restaurants and hotels (5.9% YoY from 7.4% YoY in September);
– food and non-alcoholic beverages (3.6% YoY from 4.7% YoY in September);
– healthcare (4.8% YoY from 5.1% YoY in September);
– alcoholic beverages and tobacco (4.5% YoY from 4.7% YoY in September).

Meanwhile, the country’s annual core CPI inflation, which excludes volatile categories such as food and non-alcoholic beverages, fuels and energy, decelerated to 3.9% in October from 4.1% in September.

It has been the lowest core inflation rate since April 2022.

The South African Rand was 0.42% weaker on the day against the US Dollar, with the USD/ZAR currency pair last trading at 18.1132.

The South African Reserve Bank is expected to reduce borrowing costs by 25 basis points to 7.75% at its final policy meeting for the year tomorrow.

“Investors will focus on the SARB’s future guidance and the inflation outlook, which could influence bond yields and the ZAR,” Andre Cilliers, currency strategist at TreasuryONE, was quoted as saying by Reuters.