The Reserve Bank governor's alarming bread price graph
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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