South Africa News

Reserve Bank governor says main task is price stability

The primary mandate of the South African Reserve Bank is price stability, its governor said on Wednesday.

The divergent statements echoed a heated argument among senior ANC officials over whether its mandate should be expanded, in a debate that has rattled markets.

“The constitution outlines the primary mandate of the Reserve Bank, being to protect the value of the currency in the interests of balanced and sustainable growth,” governor Lesetja Kganyago said.

“The independence and competence of the Reserve Bank all come from the constitution.”

Senior officials of the governing ANC contradicted each other on Tuesday over whether the party had decided to expand the bank’s mandate to include boosting employment and economic growth alongside inflation-targeting, hours after data showed the country’s worst economic contraction in a decade.

The SACP, a key ANC ally, waded into the debate on Wednesday by saying the bank’s mandate should be expanded.

It said in a statement: “The mandate of the South African Reserve Bank must explicitly include employment growth targeting – with a consequential amendment to the Reserve Bank Act,” the SACP said in a statement.

ANC Secretary-General Ace Magashule said the ANC NEC had agreed to expand the mandate of the Reserve Bank.

ANC economic transformation head, Enoch Godongwana insists the party has not taken a decision to expand the mandate of the Reserve Bank.

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Source: Reuters