SOUTH Africa’s central-bank governor said the country is in a strong position to deal with global monetary policy tightening and the gradual pullback by policy makers from the stimulus measures enacted amid the Covid-19 pandemic.
When developed countries start to normalize interest rates, Africa’s most industrialized nation will be “going into normalization from a very solid basis,” Lesetja Kganyago told an investment conference on Thursday.
“The economy is less vulnerable than it was last year –- we have got a current-account surplus and the budget balance has recovered faster than we had actually expected,” he said. “That should help the Treasury stabilize debt.”
South Africa posted its first current-account surplus in almost two decades in 2020 as import demand was suppressed by the economy’s contraction and the value of gold exports rose due to higher prices for the commodity. The central bank forecasts the current-account surplus to average around 1.3%
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