SOUTH AFRICA must have inflation-target talk, Buthelezi says




The article stresses upon the South African Central Bank’s role and commitment towards Inflation Targeting. South Africa formally introduced inflation targeting in February 2000 and the Central Bank has restated its role in “Achieving price stability contributes towards underpinning the stability of the entire financial system.” The central bank’s Monetary Policy Committee has left is benchmark rate unchanged at 7% to keep the inflation within the target range until at least the end of 2019.


Topics covered are Interest rates, Inflation, relationship between Interest rates and Inflation, contractionary monetary policy and its consequences. Explain using the National output diagrams and discuss the combined effect of contractionary monetary policy on Inflation, Economic Growth and unemployment.


Evaluation will include effectiveness of Monetary policy to tackle Inflation and its further effects on Unemployment, Economic Growth , impact on the consumers, producers and society in short term and long term.