The Relative Merits and Implications of Inflation Targeting for South Africa

Author/Editor:

Gunnar Jonsson

Publication Date:

August 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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.

Series:

Working Paper No. 1999/116

Subject:

Banking Exchange rates Foreign exchange Inflation Inflation targeting Monetary policy Monetary policy frameworks Monetary policy instruments Prices

English

Publication Date:

August 1, 1999

ISBN/ISSN:

9781451853919/1018-5941

Stock No:

WPIEA1161999

Pages:

24

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