Minister of Finance Enoch Godongwana has set a new inflation target of three percent, with a one percentage point "tolerance band."
Delivering the Mid-Term Budget Policy Statement MTBPS in Parliament on Wednesday, Godongwana says the one percentage point band allows flexibility to accommodate any unexpected inflationary shocks.
The minister says this is in line with South Africa's approach to inflation targeting, which has always been a flexible one, looking beyond short-run deviations in inflation while affirming that the Reserve Bank will pursue the three percent target on a continuous basis.