Africa-Press – Eswatini. Business Eswatini (BE) Chief Executive Officer (CEO), Nathi Dlamini, lamented on the high inflation rate, defining it as a major cause of poverty in Eswatini.
Dlamini said inflation was insidious and treacherous as it quietly destroyed the value of the little money one carries in their wallet every day. “It ranks up there with corruption and I think it should be handled with extreme urgency the minute it rears its ugly head,” said the CEO. Dlamini said right now, interest rates were high but this was not without cause. He said in order to tame inflation; interest rates must go up so as to prevent the economy from overheating and creating further inflation. He said the control of interest rates in the country was a mandate that rests with the central bank and was probably the only monetary policy intervention available at disposal to control inflation.“I look at interest rates as a bitter pill that must be swallowed in order to prevent an extremely disastrous situation caused by inflation,” he said. The CEO added that as Business Eswatini, they hate the fact that interest rates are high because they increase business costs, especially on factors of production like investment capital.
Expansion
He said not only that, they tame businesses from borrowing, which in turn retards business growth and expansion. He said if one looked at the credit extension to the private sector by banks, one would notice that until recently, the numbers have been extremely subdued. “Why? Because of high interest rates,” he stated. Dlamini added that it was also worth noting that the primary focus of interest rates was to maintain price stability and predictability, which meant it was an attempt by the Central Bank of Eswatini to protect the purchasing power of the money in people’ wallets. He said but over and above this, it was also to protect the country’s currency peg to the Rand against any undue volatility seeing that Eswatini belonged to the CMA (Common Monetary Area).
Dlamini further highlighted that the central bank had been very vigilant and prudent in ensuring that the country maintained a good balance between these competing factors.
“In fact, Business Eswatini has taken the view that inflation will finally succumb to the pressure of our monetary intervention policy leading to interest rate cuts of probably up to 50 basis points before the year’s end – that is, if all things remain equal. Again, I would like to reiterate that inflation if left untamed can cause untold poverty and misery in a country,” said the CEO.
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