By Enyichukwu Enemanna
South Africa’s Finance Minister says, contrary to expectations that he would announce a lower inflation target for the central bank at the mid-term budget, there is no immediate plan to do so.
Enoch Godongwana’s clarification on Friday comes a day after the central bank said it would now aim for 3% inflation, as against 4.5%, despite the Finance Minister not yet signing off on a formal change to the current 3%-6% target range.
The responsibility of setting the target rests on the Finance Minister.
“Any adjustments to our inflation-targeting framework will follow the established consultation process,” Minister Godongwana said in a statement.
“This means comprehensive consultation between National Treasury, the Reserve Bank, Cabinet, and relevant stakeholders – not unilateral announcements that pre-empt legitimate policy deliberation,” he added.
South African Reserve Bank Governor Lesetja Kganyago has been pushing for a lower target for years, saying the current target band is too wide and does not create room for the competitiveness of Africa’s biggest economy.
