Latest news with #Sarb
IOL News
14-07-2025
- Business
- IOL News
Pityana prepares for another legal showdown with Absa and SA Reserve Bank
Sipho Pityana said the judgment is a win not just for me, but for the integrity of our financial system and the rule of law in South Africa. Former Absa board member Sipho Pityana is bracing for another bruising battle with the bank as well as the South African Reserve Bank (Sarb) in the court of law in his fight for reform in the banking sector. This comes as Absa and the Sarb's Prudential Authority (PA) both filed applications for leave to appeal the Pretoria High Court ruling last month that vindicated Pityana in his claim that the PA broke the law in interfering with his possible nomination as Absa chair in 2021. The PA controversially consulted with third parties regarding his suitability for the chairperson role, particularly following inquiries into his resignation from AngloGold Ashanti amid allegations of sexual harassment - claims he firmly denies. The court found that the PA acted unlawfully by adopting an informal process to review Pityana's nomination, as prescribed by the regulations in place under the Banks Act. Pityana's legal battle began when he sought a declaratory order against the PA, claiming they had operated outside the legal framework established for such considerations. He did not seek any relief against Absa. However, Absa said it would take the judgment on review. 'After careful consideration of the 13 June 2025 High Court judgement, Absa will respectfully seek leave to appeal. It should be noted that the Court made no findings against Absa, save to order that it was jointly liable with the Prudential Authority for the applicant's costs,' Absa told Business Report on Monday. The court's judgment, delivered by Judge Flatela Luleka last month, established that the PA had indeed overstepped its bounds by failing to follow established protocols, thus denying Pityana the opportunity to contest objections to his appointment. 'The [PA] acted unlawfully and in excess of its power per the Banks Act 94 of 1990 by engaging in an informal process with the [Absa Group] and [Absa Bank] in connection with the nomination of [Pityana] as chairperson of the [Absa Group] and [Absa Bank's] board of directors, and in particular by notifying the [Absa Group] and [Absa Bank] of its objection, alternative intention to object to [Pityana's] nomination,' read the judgment. PA spokesperson, Thoraya Pandy, also confirmed on Monday that the PA is going back to court on the matter. 'Yes you are right, we have lodged an appeal. The documents are in the public domain and you can reach out to the courts for it, as we do not share it directly to anyone,' Panday said. Speaking with Business Report last month, Pityana said the case had raised serious concerns regarding the independence of the Sarb and also urged for a formal investigation into what he describes as "cosy relationships" between key figures in the banking sector. He said the judgement raised a number of new questions in terms of transparency, good governance and ethical conduct in the financial sector's regulatory environment, as well as accountability when laws are broken. On Monday, Pityana said there was nothing really surprising about these applications for leave to appeal. 'The more curious one is why Absa is appealing the judgement when no finding is made against them. Indeed, why are they spending so much resources on a case in which they are cited only as an interested party. It already speaks to collusive behaviour,' Pityana said. Pityana's legal battle extends beyond this ruling; he is also contesting his removal from the Absa board through separate legal proceedings. BUSINESS REPORT
IOL News
10-07-2025
- Business
- IOL News
South Africa's crypto market faces regulatory reckoning amid tax demands
The Financial Sector Conduct Authority introduced licensing requirements for crypto asset service providers under the Financial Advisory and Intermediary Services Act, aiming to strengthen consumer protection by classifying crypto assets as financial products. Image: Independent Newspapers/File AS South Africa's cryptocurrency sector hurtles through a turbulent regulatory and tax landscape, evolving rules and heightened scrutiny are forcing investors and service providers to scramble for clarity. As regulatory authorities tighten their grip, questions loom large: How do capital gains taxes apply to crypto disposals? What exactly are the obligations for those simply holding digital assets? While cryptocurrencies may not be legal tender, the SA Revenue Service (Sars) has made one thing clear — it is treating them as taxable intangible assets, triggering capital gains tax upon sale or disposal. The Financial Sector Conduct Authority (FSCA) introduced licensing requirements for crypto asset service providers under the Financial Advisory and Intermediary Services (Fais) Act, aiming to strengthen consumer protection by classifying crypto assets as financial products. Meanwhile, the Gauteng High Court's recent ruling on cryptocurrencies and exchange control regulations sparked significant debate, with the SA Reserve Bank (Sarb) appealing the decision and maintaining its stance that crypto is not legal tender. As the Sarb continues to shape its regulatory approach, crypto investors and service providers face ongoing challenges in adapting to this evolving landscape. Adding another regulatory layer is the Financial Intelligence Centre (FIC), which enforces anti-money laundering and counter-terrorism financing compliance, mandating registration and reporting duties for crypto providers. This dynamic regulatory environment seeks to balance innovation with investor safety and financial stability. To get more insight on this, the Sunday Independent spoke to Sebaga Matabane, the chief executive of a leading Crypto Firm as well as a derivatives and fintech expert. Matabane is also a recognised key opinion leader in Africa's fintech and digital assets space and an FSCA-approved key individual. She brings together deep regulatory insight, strategic foresight, and operational leadership. Sebaga Matabane is a derivatives and fintech expert and a recognised key opinion leader in Africa's fintech and digital assets space. Image: Supplied Sunday Independent (SI): How does the capital gains tax framework apply to cryptocurrency disposals for individual investors in South Africa? Sebaga Matabane (SM): When an individual in South Africa sells or otherwise disposes of cryptocurrency — whether by trading, converting to fiat, or using it for purchases — it triggers a capital gains tax (CGT) event. The first R40 000 of gains annually is excluded, after which 40% of the net capital gain is included in the individual's taxable income. For those in the top tax bracket, this translates to a maximum effective CGT rate of 18%. Timing and accurate record-keeping are key, especially as Sars sharpens its focus on digital asset transactions. SI: What are the tax implications for South African crypto investors who only hold their assets without disposing of them? SM: If you're merely holding crypto without selling, converting, or using it, there's no immediate tax liability — but that doesn't mean it flies under the radar. Sars requires all crypto holdings to be declared in your tax return, even if no taxable event has occurred. Think of it as financial transparency now, to avoid compliance issues later. SI: What licensing requirements does the FSCA impose on crypto asset service providers under the Financial Advisory and Intermediary Services (FAIS) Act? SM: The FSCA now defines crypto assets as financial products, which means any business offering crypto-related services — such as exchanges, trading platforms, or wallet providers — must be licensed as a Financial Services Provider (FSP) under the FAIS Act. This includes appointing approved key individuals, meeting fit and proper requirements, having compliant governance structures, and aligning with ongoing conduct obligations. The intention is to create market integrity, promote professionalism, and ensure consumer protection. SI: How does the FSCA's classification of crypto assets as financial products impact consumer protection in the crypto market? SM: This classification is a game changer. It brings crypto under the same protective framework as other financial instruments, enabling the FSCA to monitor and act against misconduct, misrepresentation, and unfair business practices. Consumers can now benefit from advice from licensed providers, recourse mechanisms, and better disclosure standards. It sets the stage for a more trustworthy and accountable market. SI: How is the SARB approaching the regulation of cryptocurrencies, given that they are not recognised as legal tender? SM: While the SARB maintains that crypto assets do not qualify as legal tender, it acknowledges their growing influence. Its approach is cautious but strategic: it collaborates with other regulators through the Intergovernmental Fintech Working Group (IFWG), explores use cases via sandbox environments, and keeps a close eye on systemic risk, monetary sovereignty, and exchange control circumvention. The Reserve Bank's messaging is clear: crypto is not a threat to ignore, but neither is it a form of money just yet. SI: What is the significance of the Gauteng High Court ruling regarding cryptocurrencies and exchange control regulations, and how might SARB's appeal affect this? SM: The Gauteng High Court's decision that cryptocurrencies are not subject to exchange control regulations has major implications — it effectively opens the door for freer movement of crypto across borders, which could impact capital flows, financial surveillance, and offshore structuring. However, the Sarb is appealing the ruling, signalling its intent to retain oversight. If the appeal succeeds, crypto flows may be subjected to stricter monitoring and reporting, reshaping how exchanges and OTC desks operate. It's a legal pivot point to watch. SI: What challenges do crypto investors and service providers face in navigating the evolving regulatory and tax landscape in South Africa? SM: The biggest challenge is regulatory ambiguity coupled with rapid change. Investors are grappling with complex tax reporting, unclear treatment of cross-border transactions, and a lack of practical guidance. Meanwhile, service providers must juggle licensing deadlines, AML/CFT compliance, FIC registration, and a mounting expectation of institutional-grade conduct — all while trying to remain agile and innovative. Ultimately, navigating this space requires a blend of legal foresight, tax expertise, and operational discipline. It is clear that the country's cryptocurrency sector stands at a critical crossroads, caught between the forces of innovation and regulation. Yet within this turbulence lies opportunity. The regulatory reckoning now underway could very well lay the foundation for a more secure, transparent, and mature crypto market. But success will depend on the ability of players to adapt swiftly, comply fully, and anticipate the next wave of regulatory evolution. In this high-stakes game of compliance and innovation, one thing is certain: the rules are being written — and those who understand them, shape them, or break them will define the future of crypto in South Africa, and Africa as a whole. Get the real story on the go: Follow the Sunday Independent on WhatsApp.
IOL News
04-07-2025
- Business
- IOL News
Betting on the dollar as the world turns to gold
Gold remains the most demanded asset class for central banks globally, especially among emerging markets seeking to hedge against geopolitical risks and financial sanctions. Image: File AS global financial markets grow increasingly fragmented and unpredictable, central banks — marked by escalating geopolitical tensions, economic uncertainty, and structural volatility — are being forced to rethink their investment strategies to navigate a rapidly evolving global financial landscape The OMFIF Global Public Investor (GPI) 2025 report offers a comprehensive insight into how institutions such as the SA Reserve Bank (Sarb) are adapting to these shifting dynamics, with particular emphasis on currency diversification, asset allocation, and risk management. OMFIF (the Official Monetary and Financial Institutions Forum) is an independent think tank specialising in central banking, economic policy, and public investment. It serves as a neutral platform for engagement between the public and private sectors worldwide, producing research and hosting events to enhance understanding of the global economy. South Africa finds itself in a unique position within this context. As one of the most developed economies in Africa, the Sarb plays a pivotal role in regional monetary coordination and serves as a bellwether for emerging market reserve strategies. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ According to the GPI 2025 report, the Sarb ranks 38th globally, holding $66.2 billion (about R1.2 trillion) in international reserves — a 6% annual increase that underscores its growing importance in the global reserve architecture. The report highlights a broader trend among sub-Saharan African central banks, where 93% intend to grow their international reserves over the next one to two years. This ambition is particularly evident in countries such as Ghana, Nigeria, and Kenya, which have seen double-digit increases in their reserve holdings. South Africa, however, stands out not only for its relatively large reserves but also for its stability and institutional maturity. 'Reserve management cannot be isolated from monetary policy or financial stability,' the report noted. 'Our investment decisions must support, rather than complicate, broader policy objectives – especially during periods of stress.' This cautious approach is emblematic of the Sarb's philosophy under the current leadership. Zafar Parker, Head of Financial Markets at the Sarb, elaborated: 'South Africa has historically had significant gold holdings due to its status as a major gold producer. Although there have not been substantial additions to gold reserves recently, the rise in gold prices has increased gold's share of total reserves. 'At the end of 2019, gold comprised about 11% of total gross reserves; it now accounts for nearly 20%. The recent fluctuations in gold prices have demonstrated its value as a haven and its role in a diversified portfolio of reserve assets. However, there has been no decision to reduce other exposures and increase gold holdings.' Gold remains the most demanded asset class for central banks globally, especially among emerging markets seeking to hedge against geopolitical risks and financial sanctions. Over 30% of central banks expect to increase their gold holdings over the next 12–24 months, while more than 40% anticipate doing so over the next five to 10 years. Yet South Africa, despite being one of the world's largest historical producers of gold, has taken a measured stance. While rising gold prices have naturally boosted the metal's share in the country's overall reserves, the Sarb has not pursued active accumulation, according to the report. 'Amid rising economic uncertainty and geopolitical tensions, the importance of gold as a portfolio diversifier has grown,' said Tuvshingerel Tumenbayar, the acting director, and Azjargal Amarsaikhan, senior economist at the Bank of Mongolia. 'We regard gold as a strategic asset that supports risk mitigation and strengthens financial security in rapidly evolving global conditions.' The report found that South Africa's reluctance to increase gold holdings reflected a broader tension between tradition and modernity in reserve management. While gold offered insulation from fiat currency volatility, the Sarb appeared to prioritise liquidity and yield through traditional instruments such as US Treasuries. 'Geopolitical risks to central bank reserves are currently considered possible, though their likelihood remains low,' Parker explained. 'We assess them because of the significant impact they could have if they were to occur. Given this risk has recently evolved from 'unthinkable' to 'unlikely but conceivable', we have not yet developed models for assessing geopolitical exposures; modelling the impact of geopolitical risk on reserve assets is very complex. Consequently, we address the issue qualitatively on a case-by-case basis.' He further said: 'We also have existing credit risk and country risk limits that can be adjusted in response to increased geopolitical risks in specific regions.' The GPI 2025 report underscored a notable shift in global reserve behaviour: while many central banks were exploring alternative currencies and asset classes, the US dollar remained the dominant reserve currency. South Africa is no exception. 'As a safe-haven asset, US Treasuries will continue to dominate financial markets,' the report quoted a central bank from sub-Saharan Africa as saying. Parker echoed this sentiment, emphasising the enduring relevance of the greenback: 'While geopolitical risks influence reserve management, South Africa sees the dollar retaining its importance despite ongoing volatility.' Sarb maintained a strong exposure to US Treasury bonds, reflecting confidence in the depth, liquidity, and resilience of the US's debt market, according to the report. This conservative posture aligned with broader trends observed across emerging markets, where capital preservation remained the top priority. 'Capital preservation is the main investment priority for 61% of survey respondents,' the report stated. 'Reserve managers are becoming wearier of volatility and the possible need to intervene — the share of respondents that prioritise liquidity rose to 29% from 20% in 2023.' Parker expanded on Sarb's approach: 'Our currency choices are mainly influenced by trade activity and foreign debt issuance. In recent years, we have been somewhat overweight in the dollar, relative to the weights implied by these metrics. This was due to the ultra-low or even negative interest rates available on safe assets from other major economies, which undermined the core reserve-management objective of capital preservation. 'Now that interest rates seem to be stabilising comfortably above zero, across most major jurisdictions, a more balanced currency allocation may be achievable again. The dollar is nonetheless likely to retain an important role, alongside other currencies that are important for our trade and borrowing.' Geopolitical risk emerged as a defining theme in the GPI 2025 report. Among reserve managers, 31% selected geopolitics as the primary economic factor driving their investment decisions over the next 12–24 months, up from just 4% last year. Tariffs, trade wars, and regional conflicts have prompted a re-evaluation of traditional reserve compositions. 'Diversification remains important, but it is no longer sufficient,' observed one official quoted in the report. 'We must embed optionality into our governance frameworks — ensuring that our policies and processes allow rapid adaptation to shifting conditions.' For South Africa, this means maintaining a delicate balance between diversifying away from the dollar and preserving access to deep, liquid markets. While interest in the euro and renminbi (RMB) is growing globally, with sub-Saharan Africa showing particular enthusiasm, Sarb remains cautious. 'Until significant progress is made across all core reserve asset dimensions, cryptoassets will remain outside the realm of central bank reserve management,' warned World Bank experts, Erik Feyen, Marco Ruiz, and Daniela Klingebiel. South Africa is also taking a wait-and-see approach to digital innovation in reserve management, focusing instead on enhancing traditional tools and infrastructure. 'We continue to explore the feasibility of incorporating public equities into our strategic asset allocation,' Parker revealed. 'However, our focus remains on maintaining a high degree of liquidity and capital preservation, especially in light of macroeconomic headwinds.'
Daily Maverick
03-07-2025
- Business
- Daily Maverick
Currency of credibility – Sarb nationalisation debate in Parliament opens a legacy hornet's nest
The SA Reserve Bank is still partly privately owned, a legacy quirk shared by only a handful of countries. Now, as Parliament reopens old calls to nationalise it, critics warn the real risk isn't who owns the shares, but whether new resolution powers and deposit insurance can protect ordinary savers – and whether the political signal could shake confidence in the rand. South Africa's central bank is an anomaly: part-private, with somewhere between 800 to 1,000 shareholders. In reality, those shareholders have no real say over monetary policy, but are largely a legacy from the early days of central banking – a relic that's survived global reform and local battles alike. That quirk has come before Parliament with public comment regarding the proposed, EFF sponsored, South African Reserve Bank Amendment Bill, which aims to nationalise the SA Reserve Bank (Sarb) – buying out its private shareholders and shifting the shares fully to the state – has resurfaced alongside the Financial Sector Laws Amendment Act, which arguably does far more to rewrite the country's bank failure rulebook. 'What is the problem with government being the sole shareholder on behalf of the 61 million people of South Africa?' asked EFF MP Omphile Maotwe during a Standing Committee on Finance hearing on 2 July 2025. 'If you say there will not be any change, so what is the problem when we want this thing to be in the state?' Old Mutual Wealth's chief investment strategist Izak Odendaal is blunt in his comment to Daily Maverick: 'The real shield for credibility isn't a share register but the constitutional guardrails that keep the Sarb's policy boring – on purpose'. That view clashes with economists and market watchers who say the real safeguard isn't who holds the shares, but whether the backstop works when it matters. What does history tell us? Dawie Roodt is an economist and a Reserve Bank shareholder, a fact that for transparency he declared to Daily Maverick. 'I use it for my work… but to be really honest, I have not been [to] an AGM for many, many years as well.' The dividend, he adds, is fixed and around R8 annually. 'Almost all central banks started off as privately owned banks,' he explains. That legacy has shifted in most countries, but not fully here. Private shareholders still appoint half the Sarb's directors, a governance guardrail Dawie believes still matters. 'I think that's a very good idea… you get this extra set of eyes. See what happened to Eskom or the Post Office – there was no private sector oversight.' New powers, old questions The deeper reform sits in the Amendment Act. It hands the Reserve Bank resolution authority status: power to step in if a bank fails, override insolvency, push through rescue or wind-down. It also launches the Corporation for Deposit Insurance (Codi), South Africa's first explicit deposit insurance fund – R20-billion funded by the banks themselves, not taxpayers. But that parachute remains untested. Odendaal argues that while Codi aligns South Africa with global norms, the real stress test is when confidence wobbles. 'A banking system runs on trust,' he told Daily Maverick. 'If that breaks, no insurance fund is big enough – so the signal from Parliament really does matter.' Defending the founding papers The Institute of Race Relations (IRR) argued a nationalisation-related point to Parliament that the Bill risks overstepping constitutional lines. '[This Bill] effectively provides for expropriation without compensation, which is not constitutional… Compensation has to be borne by agreement… No compensation can never be agreeable, and it must be just and equitable,' IRR representative Gabriel Crouse told MPs during the hearing. Treasury also raised somewhat adjacent nationalisation concerns. Chris Axelsson, Director-General for Tax and Financial Sector Policy, said during the hearing: 'The main point in terms of the amendment Bill that we are concerned about is the rights of the current shareholders… There's no recognition of what will happen if from one day they hold the shares and the next day the state owns those shares. It would be a forced takeover – like an expropriation of those shares.' He warned of 'bilateral investment treaties' that could drag South Africa into international legal fights. 'Changing the composition of ownership doesn't result in any material change in the current role of government… The current structure doesn't have any impact on the mandate and the independence of the Sarb.' For now, the cost of buying out shareholders remains unknown, but any forced expropriation could invite protracted litigation and ripple through foreign investor sentiment, a risk flagged repeatedly in hearings. Credibility is the currency For Roodt, that's the point. 'The only thing that changes is the signal – and that's not a good signal because what we have currently works very, very well,' he said. 'You don't even have to change policy. You just have to change the ownership… the market is going to lose confidence.' The myth that shareholders can steer monetary policy doesn't survive contact with how the Sarb works. 'As a shareholder, I have absolutely no say [in monetary policy]… the governor and deputy governors are presidential appointments,' Roodt said. 'The argument that shareholders influence policy is completely incorrect.' Despite the heat of the debate, no concrete timeline for the nationalisation amendment has been confirmed. Odendaal warns that drawn-out political noise alone can bleed credibility fast, even before a vote is called. Meanwhile, markets and savers watch whether the Sarb's resolution powers and its new insurance backstop can survive the first real test unscathed. The currency of credibility Odendaal's line on the real backstop remains verified: 'Deposit insurance is the parachute – don't panic, your money's safe,' he said. Odendaal says the Reserve Bank's real currency is credibility. 'You want your central bank to be dull and dependable,' he says. 'Once it becomes political theatre, you risk paying that cost in the currency.' Roodt's bigger worry is whether the Sarb stays ahead of the next wave: stablecoins, central bank digital currencies and the new money landscape. 'Money plays a crucial role in a modern economy… there are new kinds of money… the landscape could change completely,' he said. 'If the Reserve Bank doesn't stay on top of new technology… they risk becoming irrelevant.' 'Leave it as it is. If it's not broken, why fix it?' Roodt said. The test for South Africa's central bank won't be its share certificates, but whether the resolution powers, deposit backstops and credibility hold when the next wobble hits. DM
IOL News
30-06-2025
- Business
- IOL News
South Africa's Reserve Bank and National Treasury prepare to lower inflation target
South Africa Reserve Bank governor Lesetja Kganyago and Finance Minister Enoch Godongwana. The Sarb and Treasury are nearing the completion of their joint efforts to review and refine the nation's inflation target strategy. Image: Supplied/SARB The South African Reserve Bank (Sarb) and the National Treasury are nearing the completion of their joint efforts to review and refine the nation's inflation target strategy. A team consisting of experts and policymakers has been working diligently to formulate recommendations that aim to enhance the economic stability of South Africa, particularly in these challenging times characterised by global uncertainties. 'The joint South African Reserve Bank and the National Treasury team is almost done with its work on the inflation target and will soon present its recommendations to the Governor and the Minister of Finance,' the Sarb said in its annual report on Monday. Recently, discussions have emerged regarding whether South Africa's current inflation target midpoint of 4.5% is consistent with price stability of the 3-6% target range, and whether adjusting it to a lower rate might help secure the current trend of low inflation. Analyses undertaken by the Sarb, Treasury and other experts have highlighted significant potential benefits from reducing the inflation target to 3%, and recommendations are expected to be a vital step in addressing these economic challenges. Modelling by the Sarb for the Monetary Policy Committee meeting in May supports this, indicating that inflation expectations could decline quickly given the recent history of inflation hovering around the lower end of the target band, along with enhanced Sarb credibility. Consequently, borrowing costs would fall more significantly under the 3% scenario compared to the baseline forecast over the projected period. Sarb Governor Lesetja Kganyago, in the bank's annual report for the year ending 31 March, said underlying measures of inflation also appear to be contained. Kganyago said while risks to the outlook remained, there can be little doubt that inflation has been brought back under control for now. 'The main concern with South African inflation is not our ability to hit the target. Rather, it is that our target is high compared to other countries. For this reason, despite our success in stabilising inflation, the price level is almost 20% higher than it was in 2021,' Kganyago said. 'Although an inflation rate of 4.5% may seem moderate, it still causes prices to double every 16 years. This is hard to reconcile with our constitutional obligation to safeguard the value of the currency. For this reason, we continue to make the case for a lower target, one that aligns with international peers and promotes price stability.' According to the Sarb, headline inflation is projected to average 3.2% this year, increasing to 4.2% in 2026 before reverting to the target midpoint by 2027. This muted trajectory reflects lower inflation projections across all key components of headline inflation, supported by a favourable starting point, lower assumptions for fuel and electricity price increases and a relatively strong rand exchange rate. The trajectory of core inflation is forecast to closely track headline inflation. Inflation risks appear balanced overall, with trade policy uncertainties and potential rand depreciation posing as the main upside risks. A shift to a lower, more precise inflation target – such as a 3% headline inflation rate could bring about a range of macroeconomic benefits. These include reduced inflation and borrowing costs, improved policy transmission, and stronger economic growth. However, Citadel Global director Bianca Botes said the transition must be carefully managed to avoid unintended consequences for investment and employment. Botes said the success of a lower inflation target depends on clear communication and strong policy credibility.
