
SARB clarifies 3% inflation target as policy shifts draw mixed reactions
The MPC’s first rate cut in months underscores the SARB’s view that a lower target can support a gradual easing cycle.

The MPC’s first rate cut in months underscores the SARB’s view that a lower target can support a gradual easing cycle.

Reserve Bank Governor Lesetja Kganyago says permanently lower inflation, fiscal consolidation, and reduced country risk could cut interest rates and create space for sustainable growth.

The Reserve Bank’s repo rate cut by 25bps to 7% signals the start of a more accommodative cycle as inflation remains firmly under control.

Having reached the target of 4.5% with ‘little or no cost’, Lesetja Kganyago argues that South Africa can achieve permanently lower inflation and interest rates.