South African households caught a break in August as consumer inflation cooled to 3.3%. This marks a drop from July’s nine-month high of 3.5% and is lower than the expected reading of 3.6%. Food price growth slowed to 5.2%, down from 5.7% the previous month.

Core inflation, which strips out more volatile items like food and fuel and shows underlying trends that could shape prices in the months ahead, largely stayed the same at 3.1%, compared to 3.0% in July.

According to The Common Sense Economics and Policy Editor, Bheki Mahlobo, “An inflation print this close to the South African Reserve Bank's (SARB) new target of 3%, alongside a stronger rand, suggests room for dovishness at the central bank.”

Still, the SARB may keep rates steady at 7.00% in today’s meeting and wait for more signals from home and abroad before possibly moving on domestic rate cuts.