For the time being this will be done informally before attempting to achieve officially sanctioned harmonisation and integration of financial arrangements. In applying monetary policy in South Africa it is advisable to move away from the “eclectic” or informal inflation-targeting framework to formal inflation targeting.
The eclectic monetary policy approach has been a useful framework for containing inflation, but at times it created uncertainties about Reserve Bank decisions and actions which were perceived as being in conflict with intermediate objectives. The guidelines on the growth in money supply and bank credit extension have constantly been breached in recent years as a result of financial deepening.