South African policymakers discussing lower inflation target – Kganyago

South African policymakers are in discussions on lowering the central bank’s inflation target, its governor said on Wednesday, adding that a lower target would make the country more competitive and bring the central bank in line with peers. Lesetja Kganyago told Reuters he personally preferred a decision that would lower the target from its current range of between 3% and 6% “before we get to 2025”, but that teams from the South African Reserve Bank and National Treasury were still identifying the appropriate range and risks associated with it. “Our teams are in conversation now,” Kganyago said in an interview. “The teams will advise the governor and the (finance) minister and say ok this is the appropriate target and this is the appropriate timeline within which we have got to achieve the target.” South Africa introduced its inflation-targeting framework in 2000, and had planned to lower the target to 3%–5% and then 2%-4%. But the target was never lowered, something Kganyago views as a big mistake and has been vocal about for years.

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