Always deeply difficult was the necessity to explain and sell the government policy of believing in a low inflation environment and the unpopular policies it may require from time to time of achieving this.

What did stand out about Governor Mboweni?s era were the impressions he returned with from overseas visits, probably most of all his BIS meetings. On the international central bank circuit he must have been privy to many conversations and debates that did influence his views and coloured his domestic messages.

Indeed, under Governor Mboweni the SARB really tried to implement a monetary policy formulated according to Best International Practice.

Everything so far suggests this will continue in the new era under Governor Marcus. In this respect the transition to Governor Marcus will probably be far less dramatic compared to the change from Governor Stals to Governor Mboweni. History will probably assess the Mboweni era as highly positive.

Governor Marcus, like President Zuma in terms of the country, is privileged to take over the SARB stewardship at a time when a great global crisis has probably run its course, creating hopefully a new stable base from which another long-run cycle may be possible.

A favourable opportunity

This does not mean the coming years will be without major challenges, but it does mean a favourable opportunity.

The central challenge will presumably remain one of successfully marketing the government policy of preferring low inflation to an not always willing public, portions of which too often prefer the road of least resistance, with potentially catastrophic consequences if it were to lead to accelerating inflation, especially for the many unprotected poor.

To this end, interest rates will need to remain appropriately positive in real terms, especially in times when the economy performs well. At the same time one would expect monetary policy to be sensitive during periods of economic underperformance, especially if accompanied by an undershooting inflation rate.

Still, interest rates are probably the ultimate domestic stability anchor in a world dominated by free capital flows and an exchange rate determined by mostly free flowing market forces. For this reason one would hope for less rather than more interest rate variability.

Fast changing financial markets

Even so, at times of crisis, as we have most recently seen in 2008, 2001 and 1998, one would hope the SARB to show fleet-footedness and determination in the way it responds to fast changing financial markets and economic circumstances, at all times trying to preserve domestic stability as far as possible.

Like the Fed, besides showing a strong determination to contain inflation at low levels as prescribed by government this may well be accompanied by something best described as output gap targeting.

This would of course not be the same as targeting the growth rate, but rather the level of GDP, given a certain amount of resource slack.

Following recessions, this suggests a period of low interest rates even as growth starts to recover, as there will be for quite some while much resource slack dampening inflation while policy would presumably like to achieve a fuller use of economic resources over the full business cycle.

In all this, monetary policy can ultimately contribute optimally to creating the best conditions in which our market economy can thrive and South Africa can achieve the fastest growth possible in its institutional circumstances.

Less hands-off policy

On this score, one may wonder whether there will be small course corrections to monetary policy as prevailed during much of the Mboweni era. Perhaps a somewhat less hands-off policy towards the rand exchange rate, opportunistically participating more actively in currency markets when conditions tend to become unruly or at least less orderly, aiming to prevent excessive rand overshoots damaging to especially exporters.

Also one might hope for a somewhat faster reaction response at cyclical turning points or crisis moments, provided such events are correctly and early assessed and decisive actions decided upon.

Finally, we may hope that the population at large will come to recognize and accept to a greater degree that low inflation is to all our advantage in the long term, and that the SARB needs the freedom of action at all times to act decisively, even if this isn?t always popular.

We have every reason to express confidence in the leadership of the SARB, as much when Governor Stals made way for Governor Mboweni and as he now in his turn is preparing to make way for Governor Marcus.

Ultimately, it is the stable continuity projected by these smooth generational changes of leadership at the SARB that are most promising, as much for our economic performance as our international reputation.

Cees Bruggemans is Chief Economist of First National Bank