Lesetja Kganyago: Inequality and monetary policy in South Africa

Public lecture by Mr Lesetja Kganyago, Governor of the South African Reserve Bank, at the Nelson Mandela University, Port Elizabeth, 1 August 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

Good afternoon, ladies and gentlemen.

Debates about inequality have kicked into a higher gear in recent years – in academia, in policy circles, and in the broader political space. For central banks, especially those in advanced economies, inequality has become an inescapable issue, and experimental policies like quantitative easing are being blamed for making it worse.

In South Africa, we have had very high inequality for a very long time, so for us, these debates are not new. Nonetheless, there are new ways of thinking and new data to help us understand the issue better.

Today, I would like to make a couple of points to clear up some misconceptions that people may have about inequality and, more specifically, about the interactions between inequality and monetary policy.