This case follows Lesetja Kganyago, governor of the South African Reserve Bank (SARB), and his efforts to keep inflation between 3% and 6% and, if possible, close to the midpoint of that range (i.e., 4.5%). This policy, part of the inflation targeting (IT) regime put in place in February 2000, forced the SARB to tighten monetary policy substantially and repeatedly in 2014 and 2015, when inflation was above the target, arguably pushing the economy toward what became the first of a series of recessions. Pushing the economy toward recession just to satisfy the IT mandate sat uneasily with Kganyago, especially in a country that still had an unemployment rate of 30%. Should the SARB drop its IT mandate to focus on more balanced growth? Was it time for the SARB, and South Africa, to change course?
