Battle against inflation far from won, warns Kganyago
South African Reserve Bank Governor Lesetja Kganyago has warned that the battle against inflation is far from won.
Kganyago’s remarks, made during the release of the central bank’s second monetary policy review on Tuesday, came ahead of the release of September’s inflation numbers.
Headline consumer inflation rose to 5.4% in September, Statistics South Africa announced on Wednesday.
This is up from 4.8% in August, bringing CPI to the same level as June this year.
Stats SA said the main contributors were food and non-alcoholic beverages, which increased 8.1% year-on-year, housing and utilities, miscellaneous goods and services and transport.
Stubbornly high inflation has seen central banks around the world raise interest rates to unprecedented levels in an effort to keep prices stable.
Last month, the SARB’s Monetary Policy Committee kept the repo rate unchanged at 8.25% despite warning that headline inflation is expected to rise somewhat in the coming months.
"Inflation has been more persistent than initially thought, prompting central banks to say that they are going to keep policy tight for longer,” Kganyago said.
“But what we have seen recently has been that headline inflation has continued to decelerate but remains well above desired levels, requiring many advanced economy central banks to continue to consider even raising raise further.
“Meanwhile, world growth has been staggering along. The battle against inflation is far from being won, both here at home and globally," says Kganyago.
He reaffirmed the Reserve Bank’s policy stance, saying it will remain focused on anchoring inflation at the midpoint of the 3% to 6% target range.
"As the Monetary Policy Committee, we remain steadfast in our commitment to price stability and the necessary policy action required to anchor inflation and inflation expectations sustainably around the midpoint of the target band.
