Interest rates to remain steady

INTEREST rates are likely to remain steady through the year following further declines in consumer inflation within the Reserve Bank's 3percent to 6percent target range.

The consumer price index for February slowed to 5,7percent. This was 0,5 of a percentage point lower than in January when inflation rose to 6,2percent. On average, prices for consumer goods rose by 0,6percent between January and February, Stats SA said yesterday.

Investec economist Annabel Bishop said: "CPI inflation remains largely driven by structural or relatively demand-insensitive costs, the key one this month being increases in medical aid tariffs.

"Increases in insurance costs made up virtually the entire monthly inflation figure of 0,6percent. Without this rise in the heavily weighted insurance component (7,71percent), CPI inflation would have come out at 5,1percent year on year instead, and would fall below 4,5 percent this year."