JOHANNESBURG, June 17 (Reuters) - The South African rand was flat on Wednesday after data showed May inflation rose by less than expected, which analysts said reduced the likelihood of another central bank interest rate hike next month.

o At 1331 GMT, the rand traded at 16.18 against the dollar, little changed from its previous close.

o Headline inflation quickened to 4.5% year-on-year in May, up from 4.0% in April, and the highest since July 2024, driven mainly by fuel price rises linked to the U.S.-Israeli war against Iran.

o Nedbank economists expect inflation to rise further to nearly 5% in June, driven by higher fuel prices, before easing in the second half of the year.

o "The moderation will reflect easing oil prices following the opening of the Strait of Hormuz and continued food disinflation," they said.

o As a net fuel importer, South Africa is heavily exposed to the spike in global energy prices.

o Separate data from Statistics South Africa showed that retail sales rose 1.3% year-on-year in April, after rising by a revised 2.5% in March.

o On the Johannesburg Stock Exchange, the Top-40 index was up about 0.1%.

o South Africa's benchmark 2035 government bond strengthened, as the yield fell 11.5 basis points to 8.22%.

(Reporting by Anathi Madubela and Nilutpal Timsina; Editing by Varun H K and Barbara Lewis)