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Pretoria - Monetary policymakers may have to look at other
tools other than interest rates in the future to achieve their goals, a South
African Reserve Bank (Sarb) official said on Friday.
South Africa’s central bank has mainly used interest rates
to achieve its primary mandate of price stability. Last year, the government
added financial stability as an explicit mandate of the bank.
“It seems quite likely that there might be more use of non-interest
rate policy instruments to supplement the interest rates as a way of conducting
policy,” said Johan van den Heever, senior deputy chief economist at the bank.
“My guess is that other non-interest rate policy instruments
should be seriously looked at as supplementary instruments,” he said at a
conference to commemorate the Bank’s 90 years.
The bank has left its repo rate steady at 5.5% this year,
with inflation contained inside its 3% to 6% target since February 2010.
Inflation is expected to remain within the targeted band until the end of 2012,
except for a temporary breach in the first quarter of 2012.
The bank has reduced rates by 650 basis points between
December 2008 and December 2010.
It has repeatedly said policy making has become challenging
in the current global environment, marked by increased uncertainties and risks
to the world’s financial system.