Most probably, the elevated degree of households’ leveraging at the time of the recession has acted as a constraint on their willingness and ability to respond to the sharp decline in interest rates.
It is also noticeable that non-resident capital inflows into South Africa have not, in recent years, fed into the kind of fast domestic credit expansion that one saw in several Asian or Latin American economies. The South African Reserve Bank’s policy response I have already emphasised that the SARB does not target the exchange rate.