BoB dumps yearly inflation targeting

Presenting the 2008 monetary policy statement in Gaborone on Monday, BoB Governor Linah Mohohlo announced that the bank has also abandoned tasking itself with setting and achieving an annual inflation objective, arguing that  the price stability objective can only be achieved in the medium term (a rolling three year period), in recognition of the time lag for monetary policy to impact  on price developments.

This abandonment of a short-term horizon in inflation rate targeting comes against the background of the bank having failed to achieve its 4 to 7 percent target in 2007. The annual inflation rate stood at 8.1 percent in December 2007.