Cape Town — South Africa’s central bank governor Lesetja Kganyago has called for substantial reforms to macroeconomic policies in order to raise economic growth while decreasing exchange rate volatility and sovereign risk.
According to Business Tech, alterations that were proposed include changes in the form of structural reforms, deregulation of the nation’s transport and electricity sectors, lowering the inflation target and a shift back to predictable, transparent fiscal policy rules.
“With the rise in debt created by our efforts to confront weakening growth and failures of state enterprises, there is little chance of improving credit quality without new rules and more strategic use of macroeconomic policy,” Kganyago said.
Moneyeb reports Kganyago added that lowering the inflation target to 3%, the bottom of the current range, will be a “major benefit to fiscal policy” and economic growth, while also reducing the potential for an upward drift in the real exchange rate and cut loan-service costs for the country’s over-indebted public sector.
Kganyago was delivering a speech at the Peterson Institute for International Economics in Washington Tuesday.
Watch his speech here:
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Compiled by Junaid Benjamin
