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Small print, big figures

Monetary and exchange-rate policy

In October, Finance Minister Pravin Gordhan hinted at big economic changes. The South African Reserve Bank’s inflation strategy would be amended, the 3-6% target range for official inflation would be widened and the SARB’s primary duty to protect the value of the currency would be relaxed. Gordhan and Reserve Bank Governor Gill Marcus held long discussions and the outcome is that those changes will not take place. In his budget speech on 17 February, Gordhan insisted that long-term improvements in international competitiveness can come only from ‘lower wage-inflation, lower budget deficits, larger reserves and a more flexible and dynamic productive sector.’ South Africa’s inflation rate is higher than that of its main trading partners. So Gordhan reaffirmed both the 3-6% target and the Bank’s independent duty to manage consumer-price inflation after watching growth, employment, asset-price inflation, financial-sector stability and exchange-rate competitiveness....

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Small print, big figures

Monetary and exchange-rate policy

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