South Africa’s central bank governor has defended its response to the coronavirus economic downturn in Africa’s most industrialised nation in the face of growing calls from politicians and trade unionists to deepen its rate cuts and buy up more government bonds.
South Africa, which has recorded more than half a million infections to date, is facing its biggest downturn in 90 years this year as industry slowly reopens from restrictions.
The lockdown has devastated an already moribund economy, reeling from persistent power cuts and a lack of investment even before the pandemic. The governing African National Congress of President Cyril Ramaphosa wants the bank to take a more direct role in stimulating growth.
But the South African Reserve Bank “has been the most aggressive” bar few other central banks in developing economies, Lesetja Kganyago told the Financial Times in an interview. SARB has cut its benchmark rate by 300 basis points to 3.5 per cent over the course of this year, with the latest downward shift on July 24, as infections and a strict lockdown have battered South
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