Reserve Bank Shifts Inflation Focus to Lower Target

On 702’s Money Show with Stephen Grootes, Chief Economist Frederick Mitchell discusses the Reserve Bank Governor Lesetja Kganyago’s announcement that the Bank will now aim for the lower end of its 3–6% inflation target range. Mitchell explained that while inflation is already near this level, the shift raises challenges for the Monetary Policy Committee, which must balance price stability with economic growth. He highlighted how exchange rate fluctuations, import costs (especially fuel), and global trade tensions like the U.S.–China tariff disputes complicate this balance. A lower target may strengthen the Bank’s credibility, but it also risks tighter monetary policy that could strain consumers and businesses. Ultimately, stability in the rand and oil prices will be key in supporting the Reserve Bank’s new focus.