Reserve Bank Governor Lesetja Kganyago said on Tuesday that SA has returned to the same tricky monetary policy spot as in the mid-1990s, when a low domestic savings rate along the need for private and public sector borrowing was threatening unsustainable current account deficits, a weaker rand, and therefore higher inflation.
While the government of then-president Nelson Mandela responded"mostly" successfully, with fiscal discipline that reduced the demand for savings and helped improve SA's investment profile, the country has since faced an erosion of its governance and institutions, something in part enabled by access to cheap global capital.
In a copy of a speech delivered to the International Monetary Fund's annual Michel Camdessus lecture in Washington, D.C., Kganyago said while the debate over capital flows has shifted in the past two or three decades to reflect potentially destabilising effects, he appealed for a"risk management" approach rather than shifting to an attitude of prohibition.Get 14 days free to read all our investigative and in-depth journalism. Thereafter you will be billed R75 per month.