Here’s a snapshot of the recent history in rate change: continue
Next question:
Q: Suggestion on the next topic - could perhaps be on the country’s approach/strategy that of inflation targeting. Should this strategy remain or should we perhaps take (The Oh! so ever opinionated, self appointed Economist - Zwelinzima Vavi's opinion) that of completely doing away with it and the effects thereof. Would be great to get Karabo’s thoughts and opinions.
A: hmmmm, this is potentially a fire starter, but we’ll run and see if this will be the desired kinda flame wont we. Let’s go...
So, inflation is the measure of the change in the real value of money – this has varying effects. Inflation can be caused by a number of factors that are external from the domestic economy itself. It’s important to note that economic or monetary policy as it were is a contentious topic in itself and some organs within the body that is the state (our dear country) have vested interests in making sure that money flows at a rate that is only plausible to them. Now, I’m not saying that a particular organ of state is itself doing this, I’m merely acknowledging the fact that we have a fragmented history in this magnificent country we call home, and that monetary policy issues will never be immune to these issues, decades after we’ve bamboozled ourselves into thinking otherwise.
So, let me put it this way – if the value of money means that goods and services are bought and sold at a reasonable average price that does not rise or fall too sharply, then we have a balance. Because in economics there will always be the problem of supply and demand, this is true even in nature – the point is to try make sure that these changes in supply and demand don’t leave other people in a state of disarray (or de la ray as it were, ha, ha, ha). Thus Inflation Targeting became an element in our policy – to try make sure that the real value of our currency is intact and that we move towards a semblance of equality in way or another through economics. I personally think it should remain and it should be understood that doing away with inflation targeting could have dire consequences in terms of the store of value (money). For more info on this – check this out: http://bit.ly/5nIGYs I will not touch Zwelinzima Vavi, I know what’s good for me.. ha, ha, ha...
So there we have it – I hope I answered the questions that were asked, thank you to Naledi for the thought provoking questions.
This is the first of a series of no bullshit articles aimed at starting dialogue amongst young professionals about issues relating to money.
If you have comments or questions, please email them to we@studio83.co.za
Signing out,
Yours truly,
Karabo Owame Maelane Pictures: Max Mogale
