RESERVE BANK INTENT ON ACHIEVING INFLATION TARGET

Business Day Posted to the web on: 30 August 2007: 17:54
Reuters
THE Reserve Bank was committed to bringing inflation back within a targeted range after four consecutive months of breaches, Reserve Bank chief economist Monde Mnyande said.
Official data yesterday showed that CPIX inflation, which the Bank monitors for its policy making, quickened to 6,5% year-on-year in last month, holding above a targeted 3-6% band for the fourth straight month.
"Although the upper limit of the range has been breached ...the Bank remains committed to achieving the target range in the near term, thereby ensuring that continued confidence is placed in our currency," Mnyande said.
"One of the main problems of inflation is an erosion of people’s trust in the face value of (banknotes). This goes to the heart of monetary policy which is the need to protect the purchasing power of our money," Mnyande said.
The Reserve Bank has raised interest rates by a total of 300 basis points since June last year, and some economists say another increase could be in the offing when its monetary policy committee next meets in October