South Africa’s central bank expects inflation to remain on track to meet its new 3 percent target by 2026, Governor Lesetja Kganyago told Reuters on Tuesday.

Annual inflation for 2025, due to be released on Wednesday, is projected to fall between 3.2 and 3.4 percent, Kganyago said. Last year, the South African government and the Reserve Bank lowered the inflation target for the first time in 25 years, establishing a one-percentage-point tolerance band on either side. The bank had previously anticipated the target would be achieved only by 2027.

“We expect that inflation this year would average 3.6 percent … if you break that inflation across the categories … all of them have got a three handle which then says that we are on course even for 2026 to meet our new inflation target,” Kganyago said at the World Economic Forum in Davos.

The central bank’s main lending rate currently stands at 6.75 percent. According to Kganyago, the bank’s projection model suggests scope for up to two additional 25-basis-point rate cuts this year.

The first meeting of the South African Reserve Bank’s Monetary Policy Committee is scheduled for next week.