South Africa’s inflation target is 3%, measured as the annual change in the headline consumer price index that Statistics South Africa publishes. The Reserve Bank sets interest rates to keep inflation there, and the target is the reason its Monetary Policy Committee (MPC) raises, holds or cuts the repo rate at each meeting.

What is the target now?

The goal is 3%, and the bank allows 1 percentage point of give on either side, so a range of 2% to 4%. The Reserve Bank said it replaced the 3% to 6% range set in 2000. Inflation targeting itself began in February 2000. Its October 2026 review dates the change to July 2025, and the MPC explained it in its November 2025 statement.

The Minister of Finance and the Governor agree the target through consultation.

Does 2% to 4% mean any figure in the band is fine?

No. In November 2025 Governor Lesetja Kganyago said the band “does not mean we will be indifferent to inflation anywhere between 2% and 4%”. He said the bank wants 3%, but no central bank has the tools to deliver an exact figure all the time.

The bank said most of the time it should be expected to keep inflation within the band, with breaches “only when there are severe shocks”. When inflation moves away, it said it will explain the cause and set policy so that inflation is going back to 3%.

Does the target apply every month?

The Reserve Bank calls the target continuous: policy should aim for inflation inside the band, not for an average over a year. It also calls it flexible. A temporary miss is tolerated, provided inflation is back in the range within what the bank calls a reasonable time, usually one or two years.

That flexibility lets the MPC ride out a one-off shock such as a fuel price increase, without large rate changes to cancel it. The framework is also forward-looking. Past misses are not made up; what counts is that inflation keeps heading back to 3%.

Why does it take so long?

According to the November 2025 statement, rate decisions have their main effect on prices after 12 to 24 months. That is why the 3% target took effect in 2025 but is meant to be reached over the forecast period.

How has the target held up in 2026?

The October 2026 Monetary Policy Review shows the test. Inflation went from 3% in February 2026 to 5% by June, driven largely by dearer fuel and transport after oil prices climbed. It eased slightly in July and August. The review forecasts an average of 4.4% for 2026 and a return to 3% from the fourth quarter of 2027.

The MPC has lifted the policy rate by 50 basis points in total since the April review. The review linked the modest size of the increases to the starting point: inflation sat at target when the oil shock arrived. Failing to contain the pressure now, it said, could require significant increases later. The repo rate decision looks ahead at the forecast.

What is next?

The MPC’s next announcement is on 19 November 2026, followed by 28 January 2027 and 18 March 2027.