Investors are pushing for South Africa’s government to endorse a plan by its central bank to cut its inflation target for the first time this century, in the hopes it will permanently lower the borrowing costs of Africa’s most industrialised nation.

Portfolio managers said a rally in South African bonds and the rand in recent weeks has partly reflected bets that the country’s treasury will sign off by early next year on lowering the South African Reserve Bank’s official inflation target to 3 per cent from 3 to 6 per cent currently.

Asset managers, hedge funds and others have been preparing for missives and meetings with the National Treasury to back the change, with some advising that it will need a careful transition, said people familiar with the matter.