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Monetary policy in South Africa, 2007-21

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  • Patrick Honohan
  • Athanasios Orphanides

Abstract

This paper reviews South Africa's monetary policy since 2007 and makes recommendations towards improving the inflation-targeting framework currently in place. Following a surge in inflation into double digits in 2007/08, the South African Reserve Bank managed to guide inflation in line with the 3-6 per cent target band. Estimates of South Africa's potential output underwent successive downward revisions. The resulting output gap misperceptions contributed to the tendency of inflation to be closer to the upper edge of the band in the 2010s.

Suggested Citation

  • Patrick Honohan & Athanasios Orphanides, 2022. "Monetary policy in South Africa, 2007-21," WIDER Working Paper Series wp-2022-29, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2022-29
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    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2022-29-monetary-policy-South-Africa-2017-21.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Neryvia Pillay & Konstantin Makrelov, 2024. "The lending implications of banks holding excess capital," Working Papers 11056, South African Reserve Bank.

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    Keywords

    Monetary policy; Inflation targeting; Output gap; South Africa;
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