Governor Kganyago warns against pressuring Sarb to bring down unemployment

Reserve Bank Governor Lesetja Kganyago has again warned that putting pressure on the central bank to bring down unemployment could lead to policy mistakes.

Kganyago has delivered a public lecture at the Wits School of Governance in Parktown.

He believes that monetary policy alone is not the saving grace for the country’s socio-economic dilemma.

The reserve bank governor said that South Africa’s policymakers must find more practical solutions to deal with the country’s stubbornly high unemployment.

His comments come on the back of mounting pressure on the central bank to add unemployment to its mandate.

There are expectations for the bank to take more drastic measures to revive growth, including calls to lower interest rates.

Kganyago said that the central bank could not afford to give in to these demands at the moment.

He admitted that the bank was faced with a policy dilemma characterized by slowed economic growth and rising inflation.

But he believes macro-economic policy needs to remain prudent.

“If we allow inflation to be high, getting into the future it might undermine growth,” the central bank governor said.

Kganyago said that solutions to curb unemployment were outside of monetary policy.