Even before SA scientists, in November, told the world — to the country's great cost — that they had discovered a new variant of the coronavirus, central banks were already facing a dilemma. Omicron has just made that even more stark, with implications that go beyond monetary policy.

An interesting question for SA is whether the Reserve Bank would have acted differently if it had held its policy meeting just one week later. On November 18, it hiked the repo rate, starting an unwind of an emergency policy setting that had left it at a record low 3.5%. The move was mildly controversial, coming with no clear evidence that the inflation situation had deteriorated. ..

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