Fortunately, unlike some of the advanced economy central banks, we had not committed to forward guidance on interest rates. Nor had we changed our framework in ways that made it more backward looking, for instance through average inflation targeting. We also did not have to worry about the sequencing of balance sheet policies, a factor which appears to have complicated timely policy adjustments elsewhere.
The path to policy normalisation We started the normalisation cycle with a relatively modest 25 basis point increase at the November 2021 MPC. This was, incidentally, only a few days before Fed Chair Powell said he was retiring the term ‘transitory’ for inflation. The SARB’s gradual pace of normalisation continued with interest rate increases in January and March of this year.