President Cyril Ramaphosa/Bloomberg
The South African rand was the worst performer among major and emerging-market currencies last week amid confusion over whether the ANC is pushing to change the central bank’s mandate and to use the institution to rescue state-owned companies.
Sunday 09, June 2019
(Bloomberg) --South Africa’s ruling party says that it’s simply not prudent to nationalise the central bank now, given the cost of the exercise and the nation’s weak economy.
President Cyril Ramaphosa, 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 simply is not prudent.”
While Secretary-General Ace Magashule said that, its role must be expanded, Finance Minister Tito Mboweni and the ANC’s Head of Economic Transformation, Enoch Godongwana, said no resolutions were made on the central bank at a party meeting last weekend.
“The officials viewed the recent public spats about the mandate of the South African Reserve Bank (SARB) as not being helpful, and mitigating and undermining the confidence of citizens and of investors,” Ramaphosa said.
Government policy stating that the central bank is independent and that its mandate is to protect the value of the currency in the interest of balanced and sustainable economic growth hasn’t changed, added Ramaphosa.
The economy of Africa’s most industrialised country contracted an annualised 3.2 per cent in the first quarter, the biggest decline in a decade.