South African Reserve Bank Governor Lesetja Kganyago has reaffirmed the central bank’s commitment to bringing inflation back to its 3% target, despite mounting inflationary pressures from rising energy prices linked to the Iran conflict. Policymakers recently raised interest rates by 25 basis points to 7%, the first hike in three years, as inflation is projected to reach 4.9% by the third quarter of this year. Kganyago indicated further tightening may follow, depending on how the conflict develops. The bank adopted a formal 3% target last year, replacing the 3%–6% range that had been in place since 2000. Kganyago argued that the tighter target has already delivered benefits, including lower government borrowing costs, and insisted the bank will not reverse course despite external economic shocks.
Moneyweb