ANALYSIS: Reserve Bank Governor Lesetja Kganyago Needs To Do More To Spur Balanced Growth

Thebe Mabanga

And so, as expected, the South African Reserve Bank joined about fifty other Central Banks around the world in cutting interest as a mitigation measure against the devastating spread of the Corvid 19 virus.  

The Monetary Policy Committee unanimously cut the repo rate by 100 basis points to 5.25%.

Except of course, many of the Central Banks that have cut rates are presiding over much healthier economies while many others, from the United Kingdom to New Zealand, have had their actions complemented by stimulus packages by their governments.

None of these two conditions hold true for South Africa, which means the Reserve Bank needs to do more.

The most intriguing aspect of the Reserve Bank’s response is that its focus, inflation, is not a threat in the near future.

Nedbank points out that “price pressures are expected to moderate significantly on the back of the collapse in