Global Courant
South African Reserve Bank Governor Lesetja Kganyago said the fight to curb rising prices was paying off and the central bank will complete its task of bringing them under control.
“Inflation is just around the corner,” Kganyago said in an interview on Metro FM on Tuesday. “What we need to see is inflation coming all the way down to within our target range.”
The central bank’s monetary policy committee has raised key rates by 475 basis points to 8.25%, the highest level in 14 years since the tightening began in November 2021.
It is trying to bring inflation back to the midpoint of 4.5% of its target range, where it favors price growth expectations.
Inflation has been above that level for more than two years and the central bank forecasts it will return to the midpoint in the third quarter of 2025.
The central bank will stop raising interest rates once it is confident inflation will return to the middle of its target range, Deputy Governor Kuben Naidoo said at a monetary policy forum in Soweto on Tuesday evening.
In May, inflation slowed to a 13-month low of 6.3% and is expected to return to the Reserve Bank’s target of 3% to 6% in June or this quarter, Kganyago said in an interview last week.
He reiterated on Tuesday that he expected inflation to be within range in the second or third quarter.
Kganyago declined to explicitly say whether he would be willing to continue serving as central bank governor when his term ends in November 2024. When asked if he would consider extending his term in office, he said:
“The Appointing Authority should be given leeway to follow the processes in terms of the SARB Act, which requires the Appointing Authority – being the President – to consult with the Board of the South African Reserve Bank , with the finance minister, apply his wits and make a decision.”
Kgangayo has been with the central bank for 12 years and has held various public service positions since 1994.
“There is nothing that drives me more than knowing that I will continue to serve my people,” he said.
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