SOUTH AFRICA'S CENTRAL BANK SETS HIGH BAR FOR RATE CUT

South Africa's central bank may be nearing the end of its interest rate hiking cycle but the bar remains very high for reductions, Governor Lesetja Kganyago said on Thursday.

The bank kept its benchmark lending rate unchanged at 7 percent for a third consecutive time in September, and has since repeatedly said it might soon halt an incremental rise in interest rates that started in early 2014 to tame inflation.

Speaking at a business conference, Kganyago said there had been some improvement to the inflation outlook recently.

"The hiking cycle may be nearing its end. However, this does not mean the interest rate reductions are imminent, as we would like to see inflation more firmly within the target range on a sustainable basis over the forecast horizon," he said.

"We are also clear that the bar for any future rate cuts has been set very high."

The bank sees consumer inflation averaging 6.4 percent in 2016, outside of its target range of 3-6 percent, before falling back within the range in 2017.

Headline CPI quickened to 6.1 percent year-on-year in September from 5.9 percent in August, pushing back above the central bank's 3-6 percent target range, data from Statistics South Africa showed on Wednesday.

Reuters