Source: Africa Publicity
Lesetja Kganyago, Governor of the South African Reserve Bank, has defended the bank’s inflation targeting framework, citing its success in maintaining economic stability over the past 25 years. However, Kganyago also emphasized the need to reassess the current 3% to 6% inflation target, suggesting that it should be lowered to align with international best practices.
Speaking at the Reserve Bank’s 2025 Biennial Conference in Cape Town, Kganyago highlighted the significant progress made since the adoption of inflation targeting. “We enjoy much lower interest rates. Back in 1998, the repurchase rate was above 20%. Today, it is just 7.5%, which is higher than the lows experienced during the pandemic, of course, but well below the averages of previous decades,” he said.
Kganyago argued that a lower inflation target would be beneficial for the economy, allowing for lower interest rates and increased economic growth. He proposed a point target of around 3% or 4%, with an error range of plus or minus 1 percentage point.
The Governor’s comments come as the South African economy continues to navigate challenges such as high unemployment and slow economic growth. Kganyago’s advocacy for a lower inflation target is seen as a key step towards achieving sustainable economic growth and stability.
Have a press release, feature, article for publication? Send it to us via Whatsapp on +233543452542.
