This in effect makes the MPC ultimately responsible for the forecast. The assumptions can make a material difference to the outcome of the longer-term inflation forecast. These assumptions, which have to be made to cover each quarter over the three-year forecast period, include international oil prices, international commodity prices, global inflation, and the starting point for the real effective exchange rate.
The assumptions are finalised at a meeting about two weeks before an MPC meeting. In the interest of transparency, these assumptions of the exogenous variables are published as an annexure to monetary policy statement. The SARB's core model has also been published, and this allows analysts to compare forecasts and understand the source of the differences in forecasts that may arise.