such as credit extension and core inflation. therefore, the'higher for longer'story for south africa is not about delayed transmission or markets misreading our intentions. secondly, the financial stability consideration has not played a big part in our thinking. no doubt, if there was a way to achieve our target that involves less stress on the system – households, firms and government – we would prefer that. but we have a resilient financial sector. liquidations and insolvencies have been limited. there are some pockets of stress, and households are certainly feeling the squeeze, but we are not like advanced economies where rates are suddenly radically higher than they used to be. we are 200 basis point above where we were before covid - 19 struck – by contrast, both the us and the euro area have seen changes that are double that, about 400 basis points. furthermore, having not had zero interest rates in south africa, no one got used to treating debt like it was nearly free. importantly, we also have a range of tools, beyond interest rates, to look after financial stability. overall, we feel we can be resolute in using interest rates to stabilise inflation, without feeling hobbled by trade - offs between our mandates. nonetheless, even if you cannot copy and paste the rationales from other economies to south africa, there still seems to be a good case for keeping rates'higher for longer'domestically. to anchor that claim with a number, in the 2010s, the repo rate averaged just over 6 %. it seems unlikely we will be going back to those kinds of average rates over the next few years. let me address the why. the starting point is the global story. as discussed, the era of ultra - low inflation rates and ultra - loose monetary policies in the advanced economies seems to be over. where once global financial conditions were loose and it was relatively easy to attract foreign money, nowadays even the very safe and liquid assets generate attractive real returns. this means investors are no longer searching the world for a bit of extra yield ; instead, it is the borrowers who must put in extra effort. 4 / 7 bis - central bankers'speeches south africa is one of those borrowers. on top of that, our domestic policy settings are also calibrated to push up rates. this is not a statement about monetary policy ; it is a statement about the environment in which we make monetary policy. consider the following. firstly, fundamentally, interest rates

in situations where the world changes for which different tactics are required. if we have learnt anything from the past four years, it is to expect surprises. we therefore need to retain optionality. the only hard promise we can make is that we will do what is needed to deliver on our mandate ; we cannot pre - commit to a specific policy path. i therefore hope, when i say'higher for longer ', that i'm heard correctly. it is not a sarb promise. it is not even our preferred outcome. instead, it is a useful way of describing the stresses in this economy – some of them from outside and some of them from within. it also conveys a viable strategy for controlling inflation despite those stresses. but higher for longer is not inevitable. we have to control inflation, but if we have different macro arrangements, that could be done more cheaply. lower for longer is also possible, and i hope we get there. thank you. 7 / 7 bis - central bankers'speeches