South Africa's April inflation drops to 5.3 percent

South Africa’s consumer inflation fell to 5.3 percent in April from 6.1 percent in March, beating market expectations of 5.55 percent year-on-year, data from Statistics South Africa on Wednesday revealed.

The decline in inflation sent the local currency, the rand, to a new 4-week high, boosting hopes for a rate cut later this year.

On a month-on-month basis, inflation fell to 0.1 percent in April from 0.6 percent previously.

The South African reserve Bank which is due to announce its latest interest rates on Thursday, targets annual CPI of between 3 percent and 6 percent.

Some economists have told the Reuters news agency they expect the central bank to keep the rate unchanged at 7 percent this month, but a cut later in the year is being priced in.

Food and non-alcoholic beverages decreased from 1.5 percentage points in March to 1.1 percentage points in April.

Transport also decreased from 1.1 percentage points in March to 0.7 percentage points in April.

Miscellaneous goods and services decreased from 1.2 percentage points in March to 1.1 percentage points in April, an increase by 7.3 percent for the year.

The consumer price index for services increased by 5.5 percent for the year, up from 5.4 percent reported in March.

Core inflation which excludes the prices of food, non-alcoholic beverages, petrol and energy slowed to 4.8 year-on-year in April from 4.9 percent.