LETTER: Printing money is useful
Governor is wrong to say this will cause inflation to spiral out of control
19 April 2020 - 20:56
The Reserve Bank governor [Lesetja Kganyago] is correct that the Bank is not permitted to print money, that is to lend directly to the Treasury.
But he is wrong to say this will cause inflation to spiral out of control. Of course he is right that inflation is caused by too much money chasing too few goods. However, the impact of money is due not just to the quantity but also to the velocity of circulation...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.