The inflation rate: what price accuracy under lockdown conditions?
Many of the constituents of the basket of goods used to measure CPI have been absent or distorted during April
This week the monetary policy committee (MPC) of the Reserve Bank meets to consider the monetary policy stance and level of the repo rate. One of the most important economic indicators for its decision is the rate of inflation. The primary indicator used to measure inflation is the consumer price index (CPI) published by Stats SA. Changes in the CPI are used as the basis for the Bank’s inflation target policy.
SA has an inflation target of 3%-6% per annum, and the central bank aims to keep the rate of inflation within this target range. If the rate of inflation accelerates with a danger of exceeding 6% for a sustained period, the Bank will increase interest rates. Conversely, if the rate drops towards or below 3% on a sustained basis, interest rates will decline...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.