South Africa still has space to raise rates, says Kganyago
South Africa still has space to raise interest rates, central bank governor Lesetja Kganyago said on Tuesday, 1 November, pointing to inflation expectations that are less anchored around the midpoint of its target range than it would like.
South African Reserve Bank governor Lesetja Kganyago. Source: Sarb
The South African Reserve Bank (Sarb) has raised interest rates at its last six monetary policy meetings in a bid to get inflation under control. Its next decision is due later this month.
"We have not reached the 'end' of our policy rate space," Kganyago said in a lecture at a university in Johannesburg, a copy of his speech showed.
"Inflation expectations, for the most part, are proving to be more responsive to current inflation outcomes than we would like, and less anchored around the midpoint of our target."
South Africa's headline consumer inflation slowed to 7.5% in September from 7.6% in August, but it is still well above the Sarb's 3-6% target range.