Amid continuing pressures to nationalise the SA Reserve Bank, and criticism that it hiked interest rates unnecessarily last year, the governor of the Reserve Bank, Lesetja Kganyago, has tweeted a warning about the perils of not taking a tough, independent stance on inflation:
What inflation rate should we have? This graph shows what the price of bread would be by 2038 - at different inflation rates. It could have been the price of any good. High inflation is not good for the welfare of our society.@treasuryrsa @saresbank ?@PresidencyZA? pic.twitter.com/2672GwaGvc— Lesetja Kganyago (@KganyagoLesetja) February 17, 2019
The graphs shows the impact of a 15% inflation rate (the average between 1983 and 1992) on the bread price: A loaf would cost R212 by 2038.
If inflation is kept at 4.5%, it would cost only R31.
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