Gordhan defends Sarb's autonomy

Johannesburg - Finance Minister Pravin Gordhan reasserted the independence of the Reserve Bank, a media report said on Sunday, following calls by the ruling party's union and communist allies to change its mandate.

The Business Times newspaper reported Gordhan had called for an end to speculation over the role of the Reserve Bank.

"This scepticisim about either the independence of our bank or the importance of its role must be dismissed completely," the newspaper quoted Gordhan as saying.

"In the tradition of our country, the central bank's independence is assured. The independence of the central bank is well understood and well established."

South Africa's Reserve Bank is one of a few in the world owned by private shareholders, who are entitled to appoint half of the board of directors but have no say in its day-to-day operations or policies.

The ANC's labour union and communist allies have called for changes to the bank's mandate, which they see as too focused on controlling inflation to the detriment of poor South Africans.

They want the mandate of the bank broadened to also look at growth and jobs.

The Reserve Bank - mandated by the government to keep inflation between 3% and 6% - argued that focusing on inflation helps reduce market uncertainty and has boosted investment.

However, the National Treasury said on Wednesday it had decided to asses the effectiveness of inflation targeting with the Reserve Bank.

President Jacob Zuma said on Friday the mandate of the Reserve Bank needed debate but it was premature to decide whether a move away from an inflation targeting framework made sense.

- Reuters