ContextAddress by Lesetja Kganyago, Governor of the South African Reserve Bank, at the 106th Ordinary Annual General Meeting, South African Reserve Bank, Pretoria, 31 July 2026.
Why it mattersSouth Africa's yearly central bank report to shareholders, explaining a rate rise and the new 3% inflation target.
- Rising prices hurt households and inflation is too high.
- An oil shock from abroad pushed inflation up.
- Crypto assets are weakly regulated compared with other finance.
- Raise the policy rate (to 7% in May) to bring inflation back to target.
- Communicate clearly so the new 3% target is believed.
- Modernise financial rules and regulate crypto assets properly.
Read the speech summary
1. A lower inflation target
At the Reserve Bank's annual general meeting, marking its 105th year, Governor Lesetja Kganyago said the biggest step since the last meeting was reforming the inflation target after 25 years: from a 3-6% range, aimed at 4.5% since 2017, to 3% plus or minus one point from 2025, in line with peers. An oil shock pushed headline inflation up to 4.5% in May, then 5% a month later, and the bank raised rates to 7% in May, then held in July; before the shock its model pointed to about 6%. He gives no promises on the rate path, but says lower inflation brings lower rates, and long bond yields near pre-war levels show markets expect the shock to pass.
2. International and technology issues
South Africa has left the FATF grey list after major investment and awaits the next evaluation; it was not invited to this year's G20 despite hosting earlier. On AI and stablecoins he sees both opportunity and threat, defends common crypto rules within the country's capital-flow controls so the playing field is level, and says payments modernisation without tokenisation can still deliver cheaper, faster payments, with a 50% stake in BankservAfrica bought and rebranded PayInc.
3. A strong balance sheet
Reserves rose from 47 billion dollars ten years ago to 74 billion, profits have rebuilt capital, and he credits well-governed institutions and staff.