Kganyago: “Rigorous” process underway to tame inflation

South African Reserve Bank Governor Lesetja Kganyago has been reappointed for another five-year term, during which he aims to focus on controlling inflation and maintaining economic stability. In a recent interview with CNBC Africa's Fifi Peters at the Sarb headquarters, Kganyago outlined his priorities for his third term. He emphasized the importance of a comprehensive approach to inflation targeting and highlighted the need for a clear rationale backed by evidence in setting inflation targets. Kganyago stressed the collaboration between the central bank and the national treasury in achieving price stability and reducing the country's risk premium to lower the cost of capital. The governor also addressed the current economic challenges facing South Africa, including sticky inflation rates and slow economic growth. Despite market expectations for interest rate cuts, Kganyago underscored that the focus should be on controlling inflation to achieve lower interest rates. He reiterated the significance of price stability as a prerequisite for sustainable economic growth and highlighted the importance of implementing sound macroeconomic policies. Looking ahead, Kganyago expressed his commitment to building a robust institution that outlives his tenure, with a strategic plan in place until 2025. He emphasized the need for diversity and inclusion in decision-making processes, aiming for a balanced representation within the South African Reserve Bank. As the governor prepares for his third term, his key priorities include enhancing price stability, promoting financial stability, and ensuring the resilience of the South African economy to external shocks.