If price pressures spread broadly across the economy, the South African Reserve Bank (SARB) will act to counter the effect of the weaker rand on inflation.
Speaking at a conference in Stellenbosch, SARB governor, Lesetja Kganyago, said: “With weak commodity prices and US policy normalisation coming closer, we cannot be complacent about the exchange rate and its potential inflation consequences.”
“Our response will not be a response to the Federal Reserve’s moves, our response will be to the second-round effects of the depreciation of the currency,” he said. .
The rand weakened less than 0.1% to $13.5291 against the dollar yesterday (Thursday), taking its decline for the year to 15%.
