SARB, Treasury in talks over inflation goal alignment – SABC Information

South African Reserve Bank (SARB) Governor, Lesetja Kganyago is confident that the bank and National Treasury will align on the inflation target.

[ICYMI] Earlier today, Governor Lesetja Kganyago addressed shareholders at the 105th Ordinary Annual General meeting of the South African Reserve Bank (SARB).

The role of SARB shareholders is limited to the following activities at the AGM:

* reviewing the SARB’s annual… pic.twitter.com/rfmQ5s67dZ

— SA Reserve Bank (@SAReserveBank) August 8, 2025

Kganyago’s comments come after Finance Minister, Enoch Godongwana poured cold water over expectations that he would move to support the bank’s preference for a 3% inflation target.

In a statement last week, Godongwana said he had no plans to announce a move to a lower target at the medium-term budget.

Addressing shareholders at the bank’s Annual General Meeting (AGM), today the Central Bank Governor says consultations between the two continue.

Kganyago has made it clear that conversations regarding the inflation target continue. He told shareholders that the official target range remains at 3% to 6% saying the bank aimed for the bottom.

“The bottom line is that it is there that that is what it is. The target range is still 3% to 6%. We will aim closer to the lower end of the inflation targeting range; nothing more and nothing less. The conversations continue. We have got the structures between the Treasury and the Reserve Bank, and these debates will take place. I have no doubt we will find each other,” Kganyago says.

First Rand CEO, Mary Vilakazi welcomed the bank’s intention to lower the target, saying it would support greater price stability.

“The intention to lower inflation at the bottom end of the SARB stated range of 3% to 6% target range should support greater price flat and stability as inflation falls and as inflation expectations gradually adjust to a lower anchor of inflation of 3%. This will usher in an era of a lower interest rate environment in South Africa that is much needed.”

The Central Bank also addressed concerns about the impact of US tariffs.

“The main concern has been that supply chain disruptions would push up prices, seeing as most other countries have taken an enlightened approach and refrained from raising their tariffs to match our measures. As the year has developed, what we have seen is mostly modest disinflationary effects, stemming from weaker demand and excess capacity. A weaker dollar has also been supportive of other countries, especially emerging markets. This has given many central banks the scope to ease policy rates and adopt more neutral policy stances,”  Vilakazi adds.

Kganyago downplayed the economic fallout, saying the bank’s latest forecasts factored in a higher tariff rate but that only moved its growth forecast for this year down by around 0.1% points.

VIDEO | SARB AGM | Inflation, US Tariffs & Economic resilience: Mary Vilakazi