Lesetja Kganyago (right), Governor of South Africa's Reserve Bank (Sarb) and his Deputy Dr Rashad Cassim.
South African Reserve Bank (Sarb) Deputy Governor, Rashad Cassim, has highlighted the crucial role of financial markets and the government bond yield curve in shaping monetary policy.
Speaking at a London Stock Exchange Group Insight Series event on Wednesday, Cassim argued that South Africa’s recent progress on inflation and fiscal stability has already delivered significantly lower borrowing costs across the economy.
Cassim said the Sarb’s primary mandate remains protecting the value of the currency to support balanced and sustainable economic growth. However, he noted that financial markets are central to how monetary policy decisions affect households and businesses.
“What we want financial markets to do is arbitrage – in other words, to price everything else against this one safe overnight rate,” Cassim said, explaining how the Sarb’s policy rate influences borrowing costs across the economy, from government debt to mortgages.
