South Africa Central Banker Urges Sticking to Debt-Reduction Plan

South Africa’s central bank governor urged the government to stick to its plan to reduce debt, as the National Treasury prepares to deliver its medium-term budget policy statement next week.

“Fiscal consolidation is necessary and needn’t be contractionary,” Lesetja Kganyago said at a forum hosted by former President Kgalema Motlanthe’s foundation in southeastern South Africa on Friday. “Stabilizing debt would reduce risk and allow for lower interest rates across the yield curve. It would also avert fiscal dominance, where central banks lose the ability to protect the value of the currency because of fiscal failure.”