Page 163 - SARB: 100-Year Journey

153
South African inflation, 1989−2021
21 Per cent
18 15 12
9 6 3 0
18 15 12
9 6 3 0
1989 1990
1991 1992 1993 1994 1995 1996 1997
1998 1999
Inflation target range: 3–6%
2000 2002
2004 2006 2008 2010 2012 2014 2016
2018 2020
Source: SARB
The other notable accomplishment was the formal adoption of inflation targeting. In the February 2000 Budget Speech, Manuel, who was then the Minister of Finance, announced inflation targeting as official government policy, with a target band of 3−6%. The reason the government followed this path was, according to Manuel, because “[a] ... healthy fiscal policy must be matched with sound monetary measures.”
Inflation targeting “... establishes a very explicit inflation target,” said Mboweni. In addition, “[it] ... makes the decision- making process transparent.”
Months before the 2000 Budget Speech, the MPC met in October 1999 for the first time, in the process making SARB
and South African history. Kahn was part of that moment. “Brain Kahn was keen in drafting the monetary policy statements,” reminisced Mboweni.
Kahn said: “He [Mboweni] did appoint a rather large committee. If I remember correctly, there were about 15 of us, which was not the optimal size. He reduced that to about six or seven. The critical thing at that point was that he did oversee this transition in decision-making.”
Kahn served at the SARB in various roles, under Mboweni (1999−2009), Marcus (2009−2014) and Governor Kganyago (2014−present), until 2018.