Private credit growth, which is the main counterpart of money supply, does at times play a role in driving inflation, yet economic and financial cycles do not always coincide, and the latter generally has a longer duration. Excess focus on credit growth in a monetary policy framework would therefore risk missing key cyclical influences on inflation.
Finally, using a currency anchor in an open economy like South Africa, with its large commodity share of exports resulting in strong terms-of-trade variations, would bring unnecessary real economic costs in the pursuit of exchange rate stability.