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'No intention to tamper with independence of Reserve bank', Ramaphosa assures business leaders

The SA Reserve Bank building.
The SA Reserve Bank building.
Image: ROBBIE TSHABALALA/Financial Mail

President Cyril Ramaphosa has assured the public that there will be no change in the mandate of the SA Reserve Bank and its independence will not be tinkered.

Speaking at a business breakfast in Rosebank on Wednesday, Ramaphosa said the ANC did not express an intention to change the mandate of the Reserve Bank but a wish that bank considers employment when in its monetary policy deliberations.

“There is no intention to tamper with the independence of the central bank. The wish that is expressed is that as it goes ahead with its policy decision it should also keep an eye on the issue of employment. The Reserve Bank will tell you that it is precisely what they focus on... There should not be anything that alarms any one. It would be alarming if the governing party says we want to change the mandate of the reserve bank,” Ramaphosa said.

“The governing party is actually saying we have a burning platform on the issue of unemployment, the independence, the standing and the role of the reserve bank will remain independent. There should be no debate about that.”

There has been uncertainty in the business community after the ANC presented its manifesto for the 2019 general elections in Durban last weekend.

In its manifestos, the ANC said: "The ANC believes that the South African Reserve Bank must pursue a flexible monetary policy regime, aligned with the objectives of the second phase of the transition. Without sacrificing price stability, monetary policy must take into account other objectives such as employment creation and economic growth."

However, analysts have warned that the manifesto points to uncertainty about the party's commitment to the bank's independence.

Finance Minister Tito Mboweni echoed Ramaphosa’s view saying the Reserve Bank discusses all the aspects of the economy before arriving on its decision on interest rates. Employment is one of them, Mboweni.

He added that political parties have a right to raise views about issues that they feel need to be debated about the South African economy. But their views should not be confused as suggesting a change in the mandate of the Reserve Bank.

Ramaphosa will lead Team South Africa which is made up of business, labour and government to the World Economic Forum Davos annual meeting from 22 to 26 January in Switzerland.

The business breakfast gives an opportunity for the delegation to develop an integrated approach to the South African input into forum’s deliberation.

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