Published: 21 August 2013

South African inflation exceeded the 6 percent upper limit of the central bank's target for the first time in 15 months as a weaker rand boosted fuel costs.

The inflation rate rose to 6.3 percent in July from 5.5 percent in June, the Pretoria-based statistics office said on its website today.

The median estimate in a Bloomberg survey of 22 economists was 6.2 percent. Consumer prices increased 1.1 percent in the month.

The Reserve Bank has held the benchmark repurchase rate at 5 percent for more than a year as the rand plunged 17 percent against the dollar this year and food and energy costs climbed.

Governor Gill Marcus said last month the bank faces a policy dilemma, unable to lower borrowing costs to stimulate an economy that's set to expand at its slowest pace since a 2009 recession this year.

Fuel prices in the country rose 6.8 percent at the beginning of July to a record high of R13.23 per liter, mainly due to a weaker rand.

While the effect of the currency's depreciation on prices was muted in the first half of the year, the inflation rate typically rises as much as 2 percentage points for every 10 percent decline in the rand, according to the central bank.
- Bloomberg

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