MEDIUM TERM BUDGET 2003-06
Manuel commends Reserve Bank
13 November 2003
Finance Minister Trevor Manuel has commended Reserve Bank Governor Tito Mboweni and his team for bringing inflation down to its targeted range of 3 to 6 percent this year.
Manuel said the Bank had created a favourable environment for household spending and business investment by bringing consumer inflation down to 5.4 percent in September as well as reducing the prime lending rate to its lowest levels in 17 years.
Presenting his Medium Term Budget Policy Statement to Parliament on Wednesday, Manuel said: "Following an increase in CPIX inflation to 11.3 percent in October 2002 after the steep depreciation of the rand in the second half of 2001, year-on-year inflation fell to 5.4 percent in September this year.
"The moderation in inflation over the past year has enabled the Reserve Bank to lower interest rates by five percentage points since June, bringing welcome relief to households and creating a decidedly more favourable environment
for business investment."
Manuel said that the current 3-6 percent inflation target range would remain in place, but that the inflation targeting mechanism would change. In line with international best practice, the target range will no longer be specified as an annual average, but as a continuous target.
Consumer inflation less mortgage costs (CPIX) will now be a continuous target of between three and six percent until further notice.
Source: BuaNews
| 
