I've noticed some discussion of late on the SA Reserve Bank's inflation targetting mandate.

The mandate was put in some time ago to keep inflation under control in a growing economy, a very valid concern at the time. However, as interest rates climbed and the economy was cooling off it became clear that the narrow mandate could be a liability.

COSATU is now pressing hard for a revision of policy, and it seems getting support from the experts.
Revisions to the Reserve Bank's inflation targeting mandate may boost demand for the country's assets, as lower borrowing costs help spur an economic recovery, according to Commerzbank.

"An adjustment to a higher inflation target would allow the central bank to cut interest rates more aggressively to accommodate a quicker path to economic recovery," Luis Costa, an emerging markets strategist at Commerzbank, said yesterday. "Rate cuts would be positive for growth and bonds" and attract funds inflows.

Minister of Finance Pravin Gordhan said he would "engage" with labour unions that have asked for the central bank's inflation targeting mandate to be revised. The central bank has been targeting a 3 percent to 6 percent inflation rate since 2000.

"If they relaxed rules or scrapped inflation targeting, it would help growth and stocks in the next two years," said Wayne McCurrie, a fund manager at RMB Asset Management.
full story from Business Report here
The part that concerns me is talk of changing the inflation target range. I'm not sure that is the real problem. To my mind the problem is the inflation target is the prime directive to the SARB, and there are other factors that they should be allowed to consider in making their decisions.

The problem is not the value of the inflation target, it is the narrow nature of the mandate.

Hopefully what will emerge is an expanded mandate that encompasses all the factors that the SARB needs to take into account, not just the inflation rate.