Lesetja Kganyago: ANC's aim to change the Reserve Bank mandate is "unconstitutional"

The Reserve Bank governor speaks out about ANC's call for a "flexible monetary policy regime".

Having announced that the South African repo rate would remain unchanged on Thursday, SA Reserve Bank governor Lesetja Kganyago took the opportunity to tackle another big financial story this week: the ANC’s aim to change the mandate of the Reserve Bank.

"The independent central bank is one of the constitutional principles that underpinned the writing of the Constitution," he said. "When you talk about changing the mandate of the Reserve Bank, you are then talking about changing the Constitution."

He added that:

"The fathers and mothers of the Constitution took the view that, for you to have balanced and sustainable growth, you need price stability. We are very thankful that our forebears thought of this.”

The ANC stated in their election manifesto, launched last weekend, that the central bank must pursue “a flexible monetary policy regime”, and should take into account employment creation and economic growth.

This stated aim of the ANC’s manifesto has met with strong criticism from some of the opposition parties, with the DA’s Alf Lees announcing that he would be writing to Minister of Finance Tito Mboweni to seek clarity on the ANC’s intentions regarding the Reserve Bank.

He said:

"The imposition of prescribed assets is exactly what the apartheid regime resorted to in desperation when they could not raise capital in the international markets. Now the ANC is to resort to the same annexation of private funds as international markets hold back on making capital available to South Africa.”

He urged the Reserve Bank to “withstand the coming onslaught”.