South Africa Treasury Rejects Central Bank’s Unilateral Inflation Target Cut

South Africa’s Reserve Bank has moved to lower the country’s inflation target without consulting the government, according to a report citing people briefed on the decision. The central bank is said to have shifted the goal to around 3%, tightening from the range previously agreed with fiscal authorities. The Finance Ministry swiftly rejected the notion that monetary officials can alter the target unilaterally, stressing that only the minister of finance has the legal authority to set or change it. Finance Minister Enoch Godongwana said he has no intention of adjusting the objective outside the formal consultation process that underpins the country’s macro-economic framework. Conflicting signals emerged in the run-up to the Medium-Term Budget Policy Statement, where some analysts expect the Treasury to propose a lower target following a sustained decline in consumer-price growth. Until any formal change is published in the budget documents, the ministry reiterated that the existing target remains in force.