Central bank chief cites SA's economy doesn't have conditions needed for quantitative easing

According to South Africa's central bank Governor, Leste Kganyago, the country's economy does not fulfil the conditions needed for quantitative easing (QE). A top official from the governing party earlier called for a team to be set up to explore the possibility of QE.

"Quantitative easing is a tool available to all central banks, but for you to do quantitative easing the following conditions have to be met: inflation must be so low that it threatens to go to zero, ... interest rates must be very low," Kganyago said. "Those conditions do not exist in South Africa."

Kganyago has also cited that the primary mandate of the central bank is price stability. He has revealed that the bank's mandate should be expanded to include job creation.

Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to increase the money supply and encourage lending and investment.

(With inputs from agencies.)