SA rates will be hiked if inflation persists, says Kganyago

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South African Reserve Bank Governor Lesetja Kganyago.
South African Reserve Bank Governor Lesetja Kganyago.
Gallo Images/Business Day/Freddy Mavunda

South Africa will raise its benchmark interest rate if accelerating inflation becomes persistent, central bank Governor Lesetja Kganyago said.

While current monetary policy stance is appropriate given the outlook for prices, there are risks on the horizon including higher energy costs and realigning exchange rates that could stem from policy tightening in advanced economies, Kganyago said in a virtual webinar hosted by Bloomberg on Friday.

"Should that be a risk that the rise in inflation is persistent and not transitory, there is no question that policy will have to adjust," he said. "If the rise in inflation brings persistence, it’s important that policymakers act with resolve."

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