SOUTH Africa’s Reserve bank said it will continue using interest rates to curb inflation, and responded to calls for its mandate to explicitly include promoting economic growth and creating jobs by saying monetary policy already targets those indicators.
At 6.25%, the Reserve Bank’s repurchase rate is still below long-term levels and in expansionary territory, South African Reserve Bank Governor Lesetja Kganyago said in a speech in Johannesburg on Tuesday.
The consequences of the central bank loosening its grip on inflation and falling behind global peers as rates are being normalised would be “too costly,” he said. “The best chance we have with monetary policy to get faster, more job-rich growth is to maintain our focus on price stability with flexible inflation targeting, a proven framework.”
The Reserve Bank’s price-stability mandate, which is prescribed by the constitution, has been a contentious issue for the governing African National Congress (ANC) for years. With the
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