BoB dumps yearly inflation targeting :: Mmegi Online

Despite the seemingly growing amount of pressure on inflation outlook, the Bank of Botswana (BoB) remains bold and optimistic about the future, predicting the annual inflation rate to fall to just above 6 percent in the last quarter of 2008, from the January 2008 figure of 8.4 percent.

Presenting the 2008 monetary policy statement in Gaborone on Monday, BoB Governor Linah Mohohlo announced that the bank has also abandoned tasking itself with setting and achieving an annual inflation objective, arguing that the price stability objective can only be achieved in the medium term (a rolling three year period), in recognition of the time lag for monetary policy to impact on price developments.

This abandonment of a short-term horizon in inflation rate targeting comes against the background of the bank having failed to achieve its 4 to 7 percent target in 2007. The annual inflation rate stood at 8.1 percent in December 2007.

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BoB dumps yearly inflation targeting

Despite the seemingly growing amount of pressure on inflation outlook, the Bank of Botswana (BoB) remains bold and optimistic about the future, predicting the annual inflation rate to fall to just above 6 percent in the last quarter of 2008, from the January 2008 figure of 8.4 percent.

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