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The Democratic Alliance (DA) welcomes the statement by the new Governor of the Reserve Bank, Gill Marcus, that "we can never intervene to achieve a particular rate of exchange for the Rand." This appeal to pragmatism, in the face of noisy pressure from the ‘alliance partners' of the ruling party, underlines the critical independence of the Reserve Bank and shows that the Governor is off to a good start. The Monetary Policy Review, published last night, shows that the Governor will continue to come under extreme pressure in keeping the price level stable as long as the ANC government persists with their mismanagement of the economy. The government has a direct influence on administered prices, like electricity tariffs, and on increases in public sector wages. In both of these areas, they are passing on hugely inflationary costs that the Governor will have to deal with using her only weapon: the interest rate. Most alarmingly, the Review shows that nominal unit labour costs skyrocketed from the end of 2007 (the ‘Polokwane Effect'?) to twice the upper inflation target limit, even as labour productivity entered a deep decline. It is clear that the Governor's biggest challenge will be battling the cost increases pushed onto her by the ANC's mismanagement of the economy. It is time for the ruling party and its partners to stop directly driving inflation in South Africa.