Inflation target is of utmost importance – Tito Mboweni
CAPE TOWN – Finance Minister Tito Mboweni on Wednesday re-iterated the current inflation target band of 3 percent to 6 percent as the most appropriate monetary policy framework for a country like South Africa.
The twin of the country's fiscal framework is appropriate monetary policy.
Mboweni said when presenting the 2020 National Budget that regular consultation on fiscal and monetary policy was critical to the sustainability of our fiscal accounts, to the balanced growth of the economy, and to protecting the welfare of our people.
“In line with that target, the moderate inflation outcomes for 2019 of 4.1 percent and the forecast for inflation to be about 4.5 percent over the next few years, has helped to lower the cost of capital to firms, households and the public sector.
“The South African Reserve Bank will continue to undertake its duties in line with section 224 of the Constitution which is to perform its functions independently without fear, favour or prejudice in the interest of balanced and sustainable growth in the Republic,” said Mboweni.
The minister further said: “For our Aloe Ferox to grow to its full potential, we need to do things that will help it in the medium to long-run – for example, augmenting the soil with the right amount of organic manure, providing the right amount of sun and the correct amount of water.”
Mboweni emphasised that for a fast-growing economy we need to make sure our children are well educated, our people are healthy and our money is invested properly.