an oil price shock, a drought, a natural disaster, or financial contagion affecting the currency), at the subsequent meeting of the Monetary Policy Committee, the SARB will fully inform the public of the nature of the “shock”, the anticipated impact on CPIX inflation and the monetary policy response to ensure that inflation returns to the target and the time frame over which this will occur.” There are two important points worth noting.
First, the clause clearly allows for us to be outside the target range because of first-round effects of supply side shocks. Second, it does not relieve us of the responsibility of getting inflation back to within the target range. The clause clearly stipulates that if CPIX is out of the target range, we have to explain why, and what we are doing about it.