A rate hike to counter October's weaker rand seems unlikely after data released yesterday showed that price increases of goods leaving factories slowed in September.
Statistics South Africa reported that Producer Price inflation rose by 16 percent year-on-year in September, 3,1 percentage points lower than the 19,1 percent recorded for August 2008.
The lower numbers in September were due to decreases in the annual rates of change for petroleum and coal products, electricity and mining and quarrying and agricultural products.
"The huge downturn was because declining commodity prices were properly reflected for the first time in September," said MacQuarie First South economist Gina Schoeman.
"The fact that commodity prices have come down so quickly means that PPI will continue to enjoy that momentum."
Stanlib economist Kevin Lings said the decline in the annual rate of change for electricity was because Eskom had switched from winter to summer tariffs for the corporates it supplies directly, which resulted in a month-on-month spike downwards.
"It is a very substantial adjustment," he said. "And the oil price has been coming down for some time, while the rand's weakness is fairly recent so it would not be captured in these numbers. Commodities in general all carry fairly significant weight [in calculating PPI] and those prices internationally have been coming down," he added.
The PPI figure follows Wednesday's lower-than-expected consumer inflation and private sector credit extension numbers.
The combination of data now seems to have squashed any argument in favour of another rate hike - a move some analysts predicted following the rand's dramatic weakness this month.
"For me that 19,1 percent for PPI in August was the peak, CPIX at 13,6 percent was the peak. I think PPI, CPI, and the credit numbers plus the rand coming back a bit, and the retail sector being particularly weak - this combination means the Reserve Bank is likely to keep rates on hold," said Lings.
"The rand is having a negative effect but it is not so severe as to cause alarm at this stage," he said.
He said a further rate hike was "not a serious consideration".
The rand was trading just over R10-$ when the JSE closed yesterday.
Nicky Weimar, senior economist at Nedbank, cautioned however that it was dangerous to use one month's numbers and see it as a trend.