Finance Minister Enoch Godongwana used his Budget Vote address to underline that the responsibility for setting the inflation-target policy resided with himself and indicated that any changes to the target would not be made in haste.

“We all agree that a lower inflation is good for the economy.

“There is no disputing that.

“There has however been some confusion as to the process of setting inflation-targeting policy in South Africa.

“It needs to be clarified that this policy responsibility resides with the Minister of Finance, who sets the target in consultation with the South African Reserve Bank (SARB),” Godongwana said, stressing that the SARB then operated independently to achieve the target.

He went on to add: “Honourable members, let me make the important point that such decisions should not be taken in haste, without the necessary technical and political engagements that achieve a genuine consensus grounded in a thorough consideration of the social and economic realities.”

Godongwana’s statement follows persistent advocacy by SARB governor Lesetja Kganyago for the current target band of 3% to 6% to be lowered, potentially to 3%, and his noting that the technical work needed to make the decision was at an advanced stage.

South Africa's inflation rate was 2.8% in May.