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We won't intervene on rand, says Marcus

By Brendan Boyle | Nov 20, 2009 | COMMENTS [ 0 ]

SOUTH African Reserve Bank governor Gill Marcus yesterday cautioned opposition parties not to confuse her independence with dissent.

In her first appearance as governor before Parliament's finance committee, which she once chaired, Marcus dodged pressure for a more interventionist central bank.

She said she would welcome debate on the bank's mandate and discussion on exchange rate policy, but she held the line set by her predecessor, Tito Mboweni, on curbing inflation and letting the markets value the rand.

Responding to compliments from Dennis Bloem, a former ANC MP now with the Congress of the People, Marcus said: "I thank you very much for your statement that I have an independence of mind - I also think I do.

"But I think it is important just to say that an independence of mind and independence in exercising decisions does not mean that you are opposition. The central bank is here in the interests of the country and is not an opposition institution."

The left wing of the ruling alliance between the ANC, the SA Communist Party and Cosatu has been pressing for a dilution of the constitutionally entrenched independence of the central bank to set monetary policy.

Finance Minister Pravin Gordhan said in his medium-term budget policy speech last month that he had opened discussions with the bank about drawing it into strategies to promote growth, which some interpreted as a signal that the government would encourage the bank to lower interest rates.

Marcus declined to be drawn on where the pending debates on monetary policy, bank independence and exchange rate control should go, but she reaffirmed that the bank would not try to manage the rand's value against other currencies.


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