BRIAN KANTOR: Forex and cash reserves — no free lunches
Running down Treasury deposits for spending increases the cash reserves of the banking system, which encourages inflation
01 December 2023 - 05:00
SA needs to raise tax revenues faster and reduce the pace of government spending growth to escape the debt trap. This is made very difficult by a stagnant economy, but fortunately there is another way. That is to sell state assets.
Asset sales or leases could be a source of income for the government to replace borrowing and interest paid. Regardless of how much the asset sales would fetch they could be made to work far better in private hands. The assets would come to be worth more and their owners and service providers, including employees, would increase their output and pay incomes and taxes. ..
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