South African central bank monetary policy committee member Rashad Cassim said it’s too soon to say whether the rand’s appreciation against the dollar in the past week will affect the country’s inflation outlook.
The currency’s value plays a “critical” factor in monetary-policy decisions, including the impact on oil and food prices, Cassim, who is head of research at the Pretoria-based South African Reserve Bank, said at a Thomson Reuters Corp. event in Johannesburg.
The rand is “one of the most volatile measures in the world,” he said. “We need a slightly longer time series.”
The currency of Africa’s biggest economy strengthened the most in the past week since July 2012, easing concern that inflation will breach the top end of the bank’s target earlier than forecast. The rand has climbed 2.9 percent in the past five days against the dollar, paring the loss this year to 5.7 percent.
Inflation quickened to 5.9 percent in February, close to the top end of the bank’s 3 percent to 6 percent target. The inflation rate rises as much as 0.2 percentage point for each 1 percentage-point decline in the rand, according to Standard Bank Group Ltd. The rand was little changed at 8.9955 per dollar by 10:01 a.m. in Johannesburg.
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