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South Africa inflation rate decreased to 4.7% y/y from 5.4% y/y in June (6.3% in May). This is the lowest rate since July 2021, when the rate was 4.6%, particularly by means of lower food, fuel and transportation costs. We think the inflation may go back to an upward trend in August, considering power cuts (loadshedding) worsened as of August, food prices globally hiked following the termination of Black Sea grain deal and base effects as July 2022 proved to be the peak for the inflation trajectory. As the average headline inflation remains within the South African Reserve Bank’s (SARB) target band, we believe this inflation figure leaves room for SARB to hold rates steady at 8.25% at the MPC meeting on September 21, despite Rand continues to weaken, and transportation bottlenecks remain. (Note: SARB targets inflation between 3% and 6%.)