Lesetja Kganyago says inflation not yet tamed

South Africa’s top central banker told the Financial Times that “the job of taming inflation is not yet done,” suggesting he’s in no hurry to cut interest rates.

The comments by Lesetja Kganyago, governor of the South African Reserve Bank, come as central banks in some emerging markets are moving to lower rates as price pressures subside.

Policy makers in South Africa, who’ve held rates steady at 8.25% since May, need to see more evidence that inflation is moving closer to the middle of an official 3% to 6% target range before changing tack, Kganyago said in an interview.

The nation’s headline inflation rate is currently at 5.1% and hasn’t fallen sustainably enough, Kganyago said, adding, “The arrival of one swallow does not make a summer.”

The central bank’s next policy meeting will be March 27.

The central bank chief also said there are ongoing discussions into tapping into a government gold and foreign exchange account held at the bank. The account has swollen to about R500 billion ($26.5 billion) due to the rand’s drop against leading currencies.

Any transfer would need to preserve the central bank’s operational independence, he said, and paying interest to banks could deplete the reserve bank’s available capital.

“Our law does not allow us to run negative equity, which means we would need to be capitalised,” he said.