South African financial markets are unlikely to be severely disrupted as global lending rates normalise, and a balanced inflation outlook means the central bank can keep interest rates low, Governor Lesetja Kganyago said on Thursday.
Kganyago told Reuters in an interview that even if capital outflows did materialise as global central banks raise their lending rates, the South African Reserve Bank’s focus was on inflation.
“Our inflation is contained. Monetary policy will not come with a stance that tries to stem capital outflows. That’s not our reaction function. … For as long as inflation on a forward-looking basis is contained, there is no need to adjust policy,” he said.