6 days ago
Enoch Godongwana challenges SARB's inflation target proposals
Finance Minister Enoch Godongwana firmly opposes the South African Reserve Bank's proposed inflation target, asserting that any changes must follow established protocols
Finance Minister Enoch Godongwana has publicly pushed back against the South African Reserve Bank's warning that the central bank cannot independently decide to lower the country's inflation target.
This comes after SARB Governor Lesetja Kganyago said last week that the Monetary Policy Committee would now use 3%, the bottom of the 3% to 6% target range, as the anchor for its forecasts. Markets took that as a signal that Treasury would soon follow suit. Godongwana, however, has made it crystal clear that this is not happening.
'It is well established that policy-making responsibility in this area resides with the Minister of Finance, working with the President and Cabinet,' he said.
'Any adjustments to our inflation-targeting framework will follow the established consultation process… not unilateral announcements that pre-empt legitimate policy deliberation.'
He added, in a statement, that he has 'no plans' to announce a move to a 3% target in October's Medium-Term Budget Policy Statement.
