Central bank facing dilemma over growth, inflation: governor

folarin okunola

January 21, 2016 12:59 PM

The South African Reserve Bank raised its benchmark lending rate by 50 basis points last year, and some analysts expect another increase on Jan. 28

South African Reserve Bank governor (SARB) Lesetja Kganyago gestures during a media briefing in Pretoria, October 6, 2014. REUTERS/Siphiwe Sibeko

The South African Reserve Bank governor said on Wednesday the bank was facing a policy dilemma of slow growth and rising inflation ahead of a decision on interest rates in Africa's most indistrialised country.

"What you can't take away from is that South Africa is facing a policy dilemma from a monetary policy perspective. We are having slowing growth and rising inflation. It is not something that we didn't expect,"Lesetja Kganyago said.

The South African Reserve Bank raised its benchmark lending rate by 50 basis points last year, and some analysts expect another increase on Jan. 28, as a sharply weaker rand and rising food prices due to drought, fuel inflation.

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