Supply shocks, monetary policy and the 3% target
· Lesetja Kganyago, Governor of the South African Reserve Bank (South Africa)
Summary written by Dark Majestic in its own words · topics: monetary policy and interest rates, inflation and price stability
LK · Lesetja Kganyago Wiki · South African Reserve Bank WikiSupply shocks, monetary policy and the 3% targetContextPublic lecture by Lesetja Kganyago, Governor of the South African Reserve Bank, at Rhodes University, Grahamstown, 4 May 2026.
Why it mattersSouth Africa's Governor explains how to apply the new 3% target while fuel and food prices rise together.
Problems raised- Central banks face a bad or very bad situation, according to the IMF.
- Successive price shocks can stack up.
- Food inflation on top of the fuel shock threatens expectations.
Solutions proposed- Start from inflation at the new 3% target.
- Deal with second-round effects pre-emptively.
- Learn from the Bundesbank's success against 1970s inflation.
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