CAPE TOWN - The Minister of Finance Enoch Godongwana has announced a new inflation target of 3% with a 1% point tolerance band.
The move agreed upon by both Godongwana and the South African Reserve Bank (SARB) governor Lesetja Kganyago replaces the previous 3% and 6.
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That target range had been in place for over two years.
According to the Minister the new framework provides flexibility to accommodate any unexpected inflationary shocks.
"Over time, the lower target will decrease inflation expectations and inflation, creating room for lower interest rates. This supports household spending and business investment, boosting economic growth and job creation," the Godongwana explained.