South Africa will have an official new inflation target of 3% following repeated calls from the South African Reserve Bank (SARB). <\/p>\n\n\n\n
The SARB has been advocating for a lower inflation target for over a year, arguing that the previous band of 3% to 6% was too wide and made the nation less competitive. <\/p>\n\n\n\n
While the SARB\u2019s Monetary Policy Committee (MPC) is responsible for achieving the target, it is actually the Minister of Finance Enoch Godongwana who sets it. <\/p>\n\n\n\n
In the latest Medium-Term Budget Policy Statement, Godongwana confirmed that the inflation target is being reduced to 3%. <\/p>\n\n\n\n
The target will have a 1 percentage point tolerance band on either side to accommodate normal economic fluctuations.\u00a0 <\/p>\n\n\n\n
The new target will be fully implemented over the next two years.<\/p>\n\n\n\n
The National Treasury stated that the revised target will benefit all South Africans, particularly poorer households. <\/p>\n\n\n\n
The SARB has previously stated that lower inflation will also lead to lower interest rates in the future.\u00a0<\/p>\n\n\n\n
Notably, the SARB was already anchoring its inflation expectations at 3% in its latest MPC meetings when making interest rate decisions, as it was already within the 3% to 6% target range.<\/p>\n\n\n\n
Inflation has remained subdued over the last year, with the latest September print sitting at 3.4%. <\/p>\n\n\n\n
The MPC are set to meet again next month, with economists expecting a further 25 basis point cut, taking the repo rate to 6.75%.<\/p>\n","protected":false},"excerpt":{"rendered":"
Finance Minister Enoch Godongwana has announced a new inflation target of 3% following repeated calls from the Reserve Bank. <\/p>\n","protected":false},"author":95,"featured_media":833854,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[11019,21742,3619],"class_list":["post-842940","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-mpc","tag-national-treasry","tag-sarb"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842940","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=842940"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842940\/revisions"}],"predecessor-version":[{"id":842945,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842940\/revisions\/842945"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/833854"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=842940"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=842940"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=842940"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}