Scheme rules that prohibited surcharging had the effect of reinforcing the distortive effects of interchange fees by preventing costs from being passed on to cardholders. They also reduced the flexibility of merchants in deciding how to respond to high-cost payment instruments.
We have, however, found core inflation to be a good indicator of the underlying inflation pressures excluding some exogenous and volatile components and exogenous shocks, and therefore a useful policy guide. Whether or not policy should focus primarily on core inflation is an issue that will be addressed by Stan du Plessis, and I am sure it will generate some interesting debate.