South African Finance Minister Pravin Gordhan said the way the central bank will target inflation has changed to take a more flexible approach than before so that it also considers growth.
In a letter he wrote to South African Reserve Bank Governor Gill Marcus, Gordhan “clearly states while we need to peg expectations about inflation, the way in which the bank will approach inflation is totally different from the past,” he said in an interview with Johannesburg-based Radio 702, meeting the demands of the Congress of South African Trade Unions.
Inflation targeting allows for a “temporary deviation” from the 3 percent to 6 percent range, he said. “This new mandate for the Reserve Bank gives the Reserve Bank the flexibility to manage inflation in a dispassionate way; not make it the sole focus of what it does,” Gordhan told the broadcaster. “We’re very mindful of growth.”
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