I will turn to this relationship in more detail shortly. For now, from a policy vantage point, preventing an inflation response is critical to keeping our overall cost of borrowing low for investment and to maintaining the competitive advantage we have gained with depreciation.
In the past two years, National Treasury has embarked on a fiscal consolidation programme and the South African Reserve Bank has entered a monetary policy tightening cycle. These actions help to reduce inflation and will foster economic stability, consistent with our respective policy frameworks. In the long run, this is good for everyone.