South African Reserve Bank Governor Lesetja Kganyago said the fight to tame rising prices was delivering results and the central bank will stick to its task to get them under control.
“Inflation has turned the corner,” Kganyago said Tuesday in an interview on Metro FM. “What we need to see is inflation declining all the way to within our target range.”
The central bank’s monetary policy committee has increased the key rate by 475 basis points to 8.25%, its highest level in 14 years, since it started tightening in November 2021.
It is trying to bring inflation back down to the 4.5% midpoint of its target range, where it prefers to anchor price-growth expectations. Inflation has been above that level for more than two years and is forecast by the central bank to return to the midpoint in the third quarter of 2025.
The central bank will stop hiking rates once it’s confident that inflation is returning to the midpoint of its target range, deputy Governor Kuben Naidoo said at a monetary policy forum in Soweto on Tuesday evening.
In May, inflation slowed to a 13-month low of 6.3% and is expected to revert to the Reserve Bank’s target range of 3% to 6% either in June or this quarter, Kganyago said in an interview last week. He repeated on Tuesday that he expected inflation to be within the range in the second or third quarter.
Kganyago declined to explicitly say whether he’d be prepared to continue serving as central bank governor when his term ends in November 2024. Asked if he would consider extending his term in office, he said:
“The appointing authority must be given the space to follow the processes in terms of the SARB Act, which prescribes that the appointing authority — being the president — must make a consultation with the board of the South African Reserve Bank, with the minister of finance, apply his mind and make a decision.”
Kgangayo has been at the central bank for 12 years and in different roles in the public service since 1994.
“There is nothing that drives me than the knowledge that I continue to serve my people,” he said.
(Updates with comment by deputy governor in fifth paragraph)