RON DERBY: Credibility intact, Reserve Bank should now consider a rates cut
The bank is at the centre of some ill-considered political debate
One of the biggest tests for emerging-market central bankers over the past few years has been maintaining credibility in the face of a strengthening US dollar and weakening domestic currencies in an environment of sluggish domestic growth. It's an environment that has served to heighten pressure from political forces against any moves to tighten monetary policy to calm inflation, a natural consequence of depreciating currencies. For a political class now competing on the fast-paced social media playing field, a simple flick of an interest rate switch fits a simpler 140-character solution for a country's economic ills. Selling structural reforms on such forums just doesn't trend as easily. Tackling low growth rates, structurally high unemployment and rising inequality are matters in the main for fiscal policy. In truth, the attacks on monetary policy custodians haven't been an emerging-market ailment alone, and very few central bankers have been immune to the pressures of fast-paced ...
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.