National Treasury has dismissed reports that Finance Minister Enoch Godongwana will make a pronouncement on inflation targeting during the upcoming Medium-Term Budget Policy Statement.
This after the South African Reserve Bank Monetary Policy Committee announced that it prefers to target inflation at some 3%.
“As a result of this announcement, an expectation has been created that the Minister of Finance will make an announcement at the Medium-Term Budget Policy Statement (MTBPS) confirming this move to a 3% target. Minister Godongwana has no plans to do this.
“It is well-established that policy making responsibility in this area resides with the Minister of Finance, working with the President and Cabinet, who sets the inflation target in consultation with the South African Reserve Bank (SARB). The SARB then operates independently in its pursuit of the inflation target,” the department said in a statement.
Godongwana emphasised that any adjustments to the inflation targeting framework will “follow the established consultation process”.
“This means comprehensive consultation between National Treasury, the Reserve Bank, Cabinet, and relevant stakeholders – not unilateral announcements that pre-empt legitimate policy deliberation.
“Any changes to the target, if necessary, will follow this process that I have outlined above,” Godongwana said. – SAnews.gov.za
