South Africa’s central bank will keep monetary policy tight for longer to tame persistent inflation, Governor Lesetja Kganyago said. The central bank’s monetary policy committee has raised the benchmark rate by a combined 475 basis points at its 10 past meetings with the aim of bringing inflation back to the 4.5% midpoint of its target range, where it prefers to anchor expectations.
The governor said it is too early to say whether the MPC will follow the Federal Reserve and pause interest rate hikes at its meeting next month. For how long it will be higher is a function of whether inflation declines to target, Kganyago said. Inflation is forecast to return within its target range this quarter or next, Kganyago said."There are still risks to the inflation outlook and we have seen that inflation has been sticky, but we are confident that inflation is coming down."