Citigroup, echoing Reserve Bank, makes case for maintaining inflation mandate
‘The lack of an explicit mandate doesn’t mean policy does not take into account the broader economy’, says Citigroup
In the midst of the debate in SA about the mandate of the Reserve Bank, one of the world’s biggest banks has warned that inflation credibility is crucial to giving policy makers a weapon to deal with market turbulence without resorting to growth-harming interest rates. “I know right now there is a bit of a question about the mandate of the South African Reserve Bank,” Catherine Mann, global chief economist at Citigroup, said in Davos, Switzerland, where she is attending the annual World Economic Forum (WEF). “In a number of emerging markets, the central bank having an inflation anchor and showing the ability to manage the overall economy effectively ... has given those economies a more stable environment in the face of cross-border capital flows.” Inflation eased to 4.5%, the mid-point of the 3% to 6% target range, in December, according to data released by Statistics SA on Wednesday The Reserve Bank’s mandate burst into the public domain when the ANC released an election manifesto ...
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