The Relative Merits and Implications of Inflation Targeting for South Africa
August 1, 1999
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Summary
This paper describes the main elements of inflation targeting, reviews its pros and cons, and examines the experiences thus far in countries using this framework. It discusses the implications and relative merits of such a framework for South Africa, and concludes that it would be feasible and desirable for South Africa to adopt explicit inflation targeting. Doing so could reduce uncertainties about the Reserve Bank’s objectives and enhance the transparency of monetary policy. However, further experience with the operational aspects of the repurchase system and a refinement of the inflation forecasting framework may be needed before inflation targeting is implemented.
Subject: Banking, Exchange rates, Foreign exchange, Inflation, Inflation targeting, Monetary policy, Monetary policy frameworks, Monetary policy instruments, Prices
Keywords: Africa, core inflation, Exchange rates, forecasting framework, Inflation, Inflation Targeting, inflation targeting country, inflation targeting economy, inflation targeting framework, inflation-targeting central banks, introduction of the inflation targeting regime, monetary policy, Monetary policy frameworks, Monetary policy instruments, South Africa, WP
Pages:
24
Volume:
1999
DOI:
Issue:
116
Series:
Working Paper No. 1999/116
Stock No:
WPIEA1161999
ISBN:
9781451853919
ISSN:
1018-5941
