When you have bravely repelled a dangerous gang that threatened your existence — as has Reserve Bank governor Lesetja Kganyago — you are fully justified in looking ahead with a renewed sense of hope and confidence in the future of SA. As he does in his introduction to the Monetary Policy Review: "This is a good time for South Africans to be ambitious. For the first time in years, I suspect our forecasts lean towards being too pessimistic rather than too optimistic. A better future is within our reach, if we choose it." We must hope with the governor that the next chapter in the monetary history of SA brings less inflation and faster growth. But it may take a different frame of mind than revealed by the review. Only more demand for goods and services than the economy can hope to satisfy without the help of higher prices calls for higher interest rates. But higher interest rates harm growth when spending is already under pressure from rising prices that follow effectively reduced supp...

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