Bank in policy ‘bind‘ – Mboweni

THE Reserve Bank was in a policy “bind” and would need to raise interest rates at some point despite a slowing economy, former central bank governor Tito Mboweni said. “They’ve been boxed in very badly,” Mboweni said yesterday in an interview with Bloomberg TV in London. “They will have to bite the bullet at some stage.” The rand’s slump to a record low this year is adding to pressure on inflation, forcing the Reserve Bank to raise the benchmark interest rate twice since July last year to 6 percent. Governor Lesetja Kganyago kept the rate unchanged last month to support an economy that is threatened with recession. Mboweni said he was “very concerned” about the rand, which had dropped 14 percent against the dollar this year. – Bloomberg