S.Africa cbank: monetary stance to change as inflation rises

The South African Reserve Bank (SARB) could change its monetary stance because of rising risks to the inflation outlook and a likely rate hike in the U.S. by year-end, its deputy governor said on Friday.
The SARB has kept its benchmark repo rate steady in Africa's most advanced economy at 5.75 percent since July last year.
The bank has however signalled since its last monetary policy meeting in May that rising oil prices, above inflation wage settlements and a weaker rand currency could stoke inflation and bring a rate rise in coming months.
Deputy Governor Daniel Mminele told a monetary policy conference in Johannesburg that domestic factors, mainly electricity tariff hikes of around 20 percent due later in the year, would compound upside risks to inflation.
"Inflation risks have increased, which suggests an unchanged monetary policy stance cannot be maintained indefinitely," Mminele said.
"We at the SARB are mindful of our mandate and committed to achieving our inflation target in the interest of balancing the systemic growth constraints," Mminele said.
At its monetary policy meeting in May the central bank said it expected headline inflation to breach the upper band of its target of 6 percent in Q1 of 2016.
Headline consumer prices, currently at 4.5 percent, have risen in the past two months having dipped below 4 percent in March on the back of the sharp fall in global oil prices.