Though policy rates were kept the same by the central bank, it’s governor, Lesetja Kganyago, said elevated fuel and food prices, and a volatile rand remained a concern.
JOHANNESBURG - Despite policy rates remaining steady, the South African Reserve Bank said elevated fuel and food prices, as well as rising global oil prices, remained a concern.
The central bank’s governor, Lesetja Kganyago, said a volatile rand was also adding to renewed risks to inflation. “The trajectory of South Africa’s headline inflation rate has been shaped primarily by fuel and food prices. Compared to the previous meeting, fuel price inflation is significantly higher at 0.4% in 2023, rising to 5.8% in 2024.”READ: Sarb's tone remains hawkish despite keeping repo rate unchangedBut Kganyago hinted at further hikes in interest rates to keep inflation at the midpoint of the central bank’s target band.
“Guiding inflation back towards the mid-point of the target band reduces the economic costs of high inflation and will achieve lower interest rates in the future.”
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