ANDILE KHUMALO: Rate cut shows Kganyago keeping his eye on inflation, not politics

21 July 2019 - 00:08 By

Fresh from his reappointment as Reserve Bank governor, Lesetja Kganyago gave the nation a piece of welcome good news when he announced that the monetary policy committee (MPC) had unanimously resolved to cut the repo rate by 25 basis points, easing pressure on a very stretched consumer. Many may have expected the political spotlight that's been on the Bank in recent times to affect Kganyago and his MPC. It was not to be. If anything, Kganyago took the opportunity to make it clear that although the outcome is a rate cut, which many have been begging for, the rationale remains inflation targeting.

"Monetary policy actions will continue to focus on anchoring inflation expectations near the mid-point of the inflation target range in the interest of balanced and sustainable growth. In this persistently uncertain environment, future policy decisions will continue to be highly data-dependent, sensitive to the assessment of the balance of risks to the outlook, and will seek to look through temporary price shocks." In layman's language: we will continue to make our monetary policy decision on the basis of inflation targeting and actual data — not political rhetoric. So get off my back and let me do my job!..

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