Ten things you need to know about inflation targeting
If not kept in check, inflation can erode savings, inhibit growth, discourage investment, cause capital flight and cause social and political unrest
Public Protector Busisiwe Mkhwebane wants the South African Reserve Bank’s mandate to be changed. Here are 10 important facts about inflation targeting, why the Bank adopted it and how it affects SA’s economy. 1. The Reserve Bank achieves its constitutional mandate of protecting the value of the rand by limiting inflation to within the 3%-6% target range. 2. Reserve Bank governor Lesetja Kganyago said a reduction in rates would be possible if inflation continued to surprise on the downside. 3. At the last monetary policy committee (MPC) meeting the repurchase rate remained unchanged at 7%, with five members preferring an unchanged stance and one member preferring a cut of 25 basis points. 4. Inflation, if not in check, can erode savings, inhibit growth, discourage investment, cause capital flight and cause social and political unrest. 5. SA adopted inflation targeting as the monetary framework in February 2000. 6. SA adopted inflation targeting to help the general public understand ...
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