New 3% inflation target bolsters rand stability

The new 3% inflation target is yielding positive results for the strength of the Rand.

That's according to economist Professor Jannie Rossouw.

The Rand has stabilised against the Dollar, trading at around R16.93 a significant improvement from April when one dollar cost R19.55.

Rossouw says the new inflation target, announced by Finance Minister Enoch Godongwana, indicates the country will be on par with the rest of the world's inflation targets.

He adds that the Rand is also shedding its long-standing track record of unpredictability in the exchange of the currency.

"The stability of the Rand and its improvement against the US dollar shows confidence in the South African economy. It also shows that the economic prospects of the country are improving," Rossouw stated.