Inflation to peak next year

South Africa's inflation is expected to peak at slightly above five-point-five percent in the first half of next year but will stay within its target range. Reserve Bank Governor Tito Mboweni told a forum in Johannesburg that lifting exchange controls could lead to more capital inflows, and he saw more exchange rate stability going forward. Reuters quotes Mboweni as saying more rand stability can be expected. He says South Africa's real interest rate is not prohibitive and that money supply and credit growth are not worrying. According to Mboweni the country's economy could grow faster with microeconomic reforms.

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