Investors in South Africa are optimistic that the government will approve a proposal by the central bank to lower its inflation target—a move expected to boost investment and consumer spending.

The plan would reduce the inflation target from 6% to 3%, which could lower borrowing costs and allow businesses and individuals to refinance existing loans at more favorable rates. Such a shift could encourage greater private-sector investment and stimulate economic activity.

South Africa’s central bank, widely respected for maintaining relatively low inflation compared to other developing nations, continues to earn the trust of global investors. The country’s current inflation rate stands at 3%, already aligning with the proposed new target.

The broader economic outlook in South Africa is also improving. Rising global prices for key natural resources such as gold and platinum are strengthening the nation’s export revenues. Many investors view the proposed policy shift as a timely step that could accelerate economic growth.