South Africa Treasury Backs Central Bank Inflation Target Review

South Africa’s National Treasury said there’s a case to be made for the central bank’s inflation target to be reviewed to improve competitiveness and given the adverse impact price growth has on the poor.

The central bank, whose current target band is 3% to 6% with a preference for inflation to be anchored at the midpoint, has advocated for it to be lowered for several years. Governor Lesetja Kganyago has repeatedly said that a single-point inflation target of 3% would be in line with South Africa’s peers and allow for lower interest rates, while making price growth less of a concern in the everyday lives of South Africans.