Market News
South African finance minister not planning to lower inflation target yet - REUTERS
JOHANNESBURG, Aug 1 (Reuters) – South Africa’s Finance Minister Enoch Godongwana said on Friday that an expectation had been created that he would announce a lower inflation target for the central bank at the mid-term budget but that he had no plans to do so.
His comments come a day after the central bank said it would now aim for 3% inflation, not 4.5%, despite Godongwana not yet signing off on a formal change to the current 3%-6% target range.
Setting the target is ultimately the finance minister’s responsibility.
“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.”
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 erodes the competitiveness of Africa’s biggest economy.
(Reporting by Sfundo Parakozov; Editing by Alexander Winning)
