Messing with the Reserve Bank will hurt the poor
Job creation and social upliftment can only happen in a healthy economy, and inflation targeting is a core component of that
Many high-income economies and middle-income economies that are seeking to transition to high-income economies, employ inflation targeting. SA is a middle-income economy, which means it can afford welfare payments and other social services that low-income economies struggle to provide from government earnings (tax) alone. These countries, such as Zimbabwe, rely on international donor aid or access to employment in neighbouring countries, among other supports. In seeking to protect the rand’s value by preventing high inflation the Reserve Bank seeks to maintain macroeconomic drivers fundamental to a stable economic system, as opposed to an economy that is heading to junk status — ultimately a failed state that is unable to make social welfare payments to the poor. Indeed, it is the poor who are most rapidly afflicted by sharply rising prices (the outcome of doing away with inflation targeting), particularly the prices of food and other necessities, as they spend the bulk of their inc...
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