South African Reserve Bank (SARB) Governor Lesetja Kganyago has reaffirmed the bank’s commitment to decisive action in preserving price stability and curbing inflation, particularly emphasizing the role of the bank in income protection for the poor. This statement was made at a recent event in New York.
The SARB, facing an uncertain inflation outlook, has maintained a steady interest rate of 8.25% since September, warning against premature celebration in managing price pressures. Inflation in South Africa has eased from a high of 7.8% in 2022 to 5.4%, slightly above the bank’s target range of 3-6%.
Policymakers are grappling with the challenge of balancing price stability with slow growth in Africa’s most industrialized nation. Power outages have been a significant factor limiting economic output. The government forecasts modest growth of just 0.8% this year and 1% in 2024, but it is hopeful for an improvement in power outages by next year, which might bolster economic performance.
Governor Kganyago’s comments underscore the SARB’s commitment to its mandate of maintaining price stability, even as it navigates the delicate balance between curbing inflation and supporting economic growth amidst challenging conditions.
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