South Africa’s Central Bank unlikely to get lower CPI goal soon
South Africa is unlikely to have a new inflation target by February’s budget, Finance Minister Enoch Godongwana said.
“I don’t want to mislead you and say there will be an announcement in February,” he said. “I don’t have the answers.”
The central bank began formally pursuing an inflation target in 2000, when it was set at 3% to 6%. In 2017, it began explicitly communicating it was aiming to anchor price expectations around the 4.5% midpoint of its target range and is now working with Treasury to review the goal.
South African Reserve Bank Governor Lesetja Kganyago reiterated his calls for it to be lowered.
“We have an opportunity to achieve permanently lower inflation and therefore permanently lower interest rates,” he said October 17.
The reserve bank last month reduced borrowing costs by 25 basis points to 8% after inflation slowed and policymakers revised their forecasts to show price pressures remaining at or below 4.5% through 2026. Inflation has since slowed further to 3.8%, its lowest level in four years.
Monetary policymakers will deliver their last rate decision of the year on November 21.
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