BLSA CEO’s Weekly Newsletter – Fiscal discipline pays off – now hold the course and accelerate reform

The South African Reserve Bank’s 25-basis-point rate hike last week was the right call. Governor Lesetja Kganyago and the Monetary Policy Committee acted to defend price stability – the foundation on which businesses plan, invest and create jobs. South Africa faces this global shock from a position of relative strength, a direct reward for eight years of fiscal discipline and structural reform. Moody’s positive outlook and S&P’s maintained positive outlook reflect that improved position. Both could translate into ratings upgrades if government holds course to the medium-term budget policy statement in October. We cannot control the global environment. We can control the domestic reform agenda – and we must press ahead with it regardless of the headwinds.   The South African Reserve Bank (SARB) made the right call last week, hiking interest rates by 25 basis points in response to rising global inflation. Governor Lesetja Kganyago and the Monetary Policy Committee did not hesitate. With inflation at 4% in April and the SARB projecting it will average 4.4% for the year, above its 3% target, the decisive response was essential. Price stability is critical to businesses’ ability to plan and invest. It also protects consumers, particularly the poor, who are […]

Read More