South Africa’s annual inflation rate fell further to a two-year low of 4.8% in July 2023, down from 5.4% in June, according to data released by the statistics office today. The inflation reading came behind market forecasts of 5%, moving further within the central bank’s target range of 3%-6%.

Transportation prices saw a notable decrease, dropping by 2.6% versus 1.8% in June, while the increase in food and non-alcoholic beverage prices moderated to 9.9% from the previous 11% in June.

The annual core inflation, which excludes prices of food, non-alcoholic beverages, fuel and energy, reached a 10-month low of 4.7% in July 2023, from 5% in the prior month and below market forecasts of 4.9%.

On a monthly basis, consumer prices increased by 0.9% in July, the most in four months, though below market estimates of a 1.1% rise. Inflation Rate Slows to 4.8% in South Africa

The South African rand extended gains in early trade on Wednesday, ahead of inflation data that could hint at the country’s future interest rate path.

The rand traded at 18.7450 to the U.S. dollar, about 0.3% stronger than its previous close. The dollar last traded about 0.1% weaker against a basket of global currencies. The rand had gained as much as 1% on Tuesday as risk appetite returned to global markets due to falling U.S. Treasury yields.

South Africa is hosting leaders from Brazil, India and China in Johannesburg for the second day of the BRICS summit of emerging economies on Wednesday, where the expansion of the bloc will likely be the topic of discussion. South Africa’s Inflation Rate Slows to 4.8%.