In Washington. Kganyago draws on Rorke's Drift to warn on inflation risks

Key topics:Kganyago urges early rate hikes, cites Rorke’s Drift analogyIran war shocks and fuel prices threaten renewed inflation spikeInflation near 3% target; SARB holds 6.75% but may tighten later.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Matthew Hill and Ntando Thukwana.South Africa’s central bank governor referenced an 1879 battle in the Anglo-Zulu war in his views on how to tackle the coming wave on inflation from the Iran war shocks, implying a preference to raise interest rates sooner rather than later.“The policy response should be to make sure that the shock becomes transitory rather than becomes persistent,” Lesetja Kganyago said on an International Institute of Finance panel in Washington on Wednesday..He used the analogy of the battle of Rorke’s Drift, where about 150 British soldiers held off thousands of Zulu warriors. At the time, a British commander told his troops to “take aim at your enemy, my boy, wait until you see the whites of his eyes, and then pull the trigger,” Kganyago said.“We do not have that luxury of waiting until we see the whites of inflation’s eyes,” he said. “By the time you decide to act, it might be too late.”Kganyago pointed to the last inflation shock that followed the pandemic and Russia’s invasion of Ukraine: “Central banks that responded late ended up having to respond more aggressively.”.Read more:.Kganyago cautions on Stablecoin growth amid regulatory gaps.Consumer inflation in South Africa slowed to 3% in February — hitting the central bank’s target — from 3.5% in the previous month. That slowdown came before the government raised gasoline prices by the most in two decades, with fears of more to come as the conflict in the Persian Gulf remains unresolved.Kganyago said last month that higher energy costs may lift inflation to 4% in the near term, while fuel-price growth may accelerate to more than 18%.The monetary policy committee left its benchmark interest rate at 6.75% when it met last month to weigh the impact of the Iran war on the bank’s inflation target, as well as other headwinds from geopolitical risks and heightened uncertainty. It warned that policy tightening may be necessary if the conflict drags on..© 2026 Bloomberg L.P.

In Washington. Kganyago draws on Rorke's Drift to warn on inflation risks

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