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Article: Reserve Bank’s inflation targeting gains credibility.(Business Report)
- Article from:
- The Star (South Africa)
- Article date:
- March 22, 2007
CopyrightCOPYRIGHT 2007 Independent News & Media PLC. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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BYLINE: Tonny Mafu
Johannesburg – The current period of relatively low inflation and strong economic growth has given credibility to the Reserve Bank’s inflation targeting policy, according to economists.
Inflation targeting involves raising or lowering interest rates to achieve a given target level of inflation. The stability created by this policy influences inflation expectations. The bank’s current target range is between 3 percent and 6 percent.
Chris Hart, senior treasury economist at Absa, said the central bank’s ability to keep inflation within the target range had greatly enhanced its credibility.
Hart ...