The exchange rate is a key factor prompting the South African Reserve Bank (Sarb) to tighten monetary policy, deputy governor Rashad Cassim said on September 6.

Central banks might be expected to “look through” inflation given the supply-side shocks that have pushed prices higher, Cassim told a conference. Central bank policy typically works most strongly on the demand side. The Sarb is tightening policy, however, as it fears second-round effects will persist beyond the point at which supply