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South Africa February Inflation Up

FILE: Shoppers make their way along the wide avenues inside the Mall of Africa in Midrand, South Africa, April 28, 2016.

JOHANNESBURG - South Africa's inflation rose slightly more than expected in February, a further indication that rolling power cuts nationwide may be fueling price pressures, data showed on Wednesday.

South Africa's headline consumer inflation rose to 7.0% year-on-year in February from 6.9% in January, Statistics South Africa said.

On a month-on-month basis, consumer inflation was at 0.7% in February compared to -0.1% in the previous month.

Analysts polled by Reuters had predicted the year-on-year figure to come in at 6.9% and month on month at 0.6%.

Core inflation, which excludes prices of food, non-alcoholic beverages, fuel and energy, was at 5.2% year on year in February, from 4.9% the previous month.

On a month-on-month basis core inflation was at 0.8% in February, compared to 0.2% in January.

The South African Reserve Bank targets inflation of between 3% and 6%.

The bank, which has raised interest rates at its last eight monetary policy meetings to tame inflation, said inflation is expected to sustainably fall to the midpoint of its target range by the fourth quarter of 2024.

"So long as renewed fears about the global banking system do not flare up, the Reserve Bank will almost certainly press ahead with a final 25 basis points interest rate hike at next week's MPC meeting," the note added.

"The rise... may be a sign that the intensification of load-shedding (power cuts) in recent months is fueling price pressures," Capital Economics said in a research note.

South Africa has been dealing with rotational power cuts on a daily basis, hampering businesses and economic growth in Africa's most industrialized economy.