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Ramaphosa: Policy on SARB 'has not changed'

Jun 06 2019 16:54
Fin24
South African President Cyril Ramaphosa arrives to

South African President Cyril Ramaphosa arrives to the parliament in Cape Town for the 2019 State of the Nation address (NASIEF MANIE/AFP/Getty Images)

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President Cyril Ramaphosa has issued a statement reaffirming the mandate of the South African Reserve Bank and describing the current spat as "not helpful".

Describing discussions held at the ANC Lekgotla on 1-3 June, Ramaphosa said: "The Officials emphasised the policy positions of the ANC on the independence and role of the SARB as set out in the Constitution of the Republic of South Africa [which is] protecting 'the value of the currency in the interest of balanced and sustainable economic growth'".

This mandate should be exercised through the responsible cabinet minister, he added.

"This policy has not changed," he said.

"It is our desire for the South African Reserve Bank to be publicly owned. However, we recognise that this will come at a cost, which given our current economic and fiscal situation, is simply not prudent."

The latest declaration by Ramaphosa, who is the president of the ANC, follows conflicting statements by ruling party heavyweights over the mandate of the central bank.

On Tuesday, the ANC Secretary-General Ace Magashule told journalists that party had resolved that the role of the bank must be expanded, while Tito Mboweni and the ANC's head of economic transformation and Finance Minister, Enoch Godongwana, said no resolutions were made on the Reserve Bank at a party meeting last weekend.

The contradiction in views from the country's leaders dented the rand's performance on Tuesday, with the currency declining by as much as 1% against the dollar in earlier on the day.

Ramaphosa noted the recent public spats about the mandate of the bank as being "not helpful, and mitigating and undermining the confidence of citizens and of investors."

The battle over the mandate of the bank, as well as its ownership, has featured prominently in ANC policy discourse since the party's elective conference in December 2017. In January this year, however, Ramaphosa assured business leaders ahead of the World Economic Forum that the independence of the Reserve Bank was "sacrosanct".

"There is no intention whatsoever to tinker with the independence of the Reserve Bank," he said.

"The independence of the Reserve Bank is sacrosanct, there should be no debate about that. We should not be alarmed," he said adding that similar debates about the role of central banks are common globally. 

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