Economics
SARB Won’t Bail Out South Africa’s State Firms, Governor Says
- Bailouts would require printing cash and fuel inflation
- Law prohibits central bank from undertaking unsecured lending
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South Africa’s central bank won’t bail out the country’s troubled state-owned companies including power utility Eskom Holdings SOC Ltd. because it would fuel inflation, Governor Lesetja Kganyago said.
Speaking in interview Tuesday hours before the ruling African National Congress said it has asked the government to explore “quantity easing” to eliminate debt and raise funds for development, Kganyago said the central bank won’t consider stepping in because it will require printing cash. It’s also prohibited by law to undertake unsecured lending, he said.