South Africa’s Kganyago Proposes “Point Target” Over Target Range

The governor of South Africa’s central bank, Lesetja Kganyago, has made the case to adopt an inflation “point target” of around 3% or 4% with a margin of error on either side, as opposed to a 3% to 6% target range used currently.

Speaking during a virtual address on inflation-targeting at Stellenbosch University on Wednesday, Kganyago says, “A more appropriate target would be a point target of around 3% or 4%, putting us in the same territory as our peers,” without saying which countries he was referring to.

According to him, the uncertainties around inflation would be useful to bracket the point target with an error range: probably plus or minus 1 percentage point.

Your Friends Also Read:  African Union partners Huawei on ICT infrastructure development

He adds that “with the COVID-19 shock, we have seen what it’s like to have inflation rates nearer 3% and, with that, low-interest rates.”

South Africa’s annual consumer inflation has since picked up to 4.6% in July, the latest month for which data are available, close to the midpoint of the bank’s target.

South Africa’s Reserve Bank cut its main lending rate by 300 basis points last year to a record low of 3.5% as inflation collapsed during the coronavirus crisis and as the economy needed support.

The bank has kept monetary policy accommodative, leaving the repo rate on hold for the past six meetings.


All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from News Central TV.

Contact: digital@newscentral.ng

Total
0
Shares
Previous Article

Inflation in Ghana Rises for the Fourth Consecutive Month

Next Article

Guinea Coup Leaders Free Dozens of Political Prisoners

Related Posts

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.