SARB aiming for 4.5% inflation
JOHANNESBURG - The Reserve Bank is aiming at a 4.5 percent inflation rate threshold.
In September, the Bank raised its benchmark repo rate by another 75 basis points to 6.25 percent.
Governor Lesetja Kganyago says the country's inflation rate is currently sitting at 7.8 percent, and it's borrowers who are feeling the pinch.
"Once you see the inflation decline back into the target -- moving towards 4.5 percent which is what we aim for -- that will be telling you that the interest rate cycle has done its job.
"And if that is sustained, then it is time to adjust policy. So the threshold here is always going to be inflation," he said.
"Put it this way, at the moment the repo rate is at 6.5 inflation. The most recent region of inflation in South Africa is 7.8 and that means if you are a saver, you are losing because interest rates are low.
"The questions that are coming here are reflective of societies we are in today that is mainly borrowers that are coming up with this understandably. So because when you adjust the policy range to deal with inflation, it's borrowers that are immediately feeling this thing."