Lesetja Kganyago. Picture: TREVOR SAMSON
Lesetja Kganyago. Picture: TREVOR SAMSON

The Reserve Bank will protect its mandate and independence as enshrined in the constitution should legislative processes on its nationalisation come to fruition. 

This is according to Reserve Bank governor Lesetja Kganyago, who was speaking after the first monetary policy committee (MPC) meeting of 2019, in which the bank kept the repo rate unchanged at 6.75%. 

The political debates around the Reserve Bank are quickly being exposed as red herrings, more reflective of the factional fights within the ANC than a desire to harness the role of the bank in the economy. 

The ANC, in its election manifesto, says that job creation and economic growth should be factors in setting monetary policy. Kganyago said the bank already does this. 

“Our mandate is to protect the value of the currency in the interests of balanced and sustainable growth ... anyone who says the Bank must focus on growth has not read the constitution, because we cannot have balanced and sustainable growth if you are running imbalances. Those imbalances include carrying unemployment,” he said. 

Turning to the nationalisation resolution of the ANC, Kganyago said the Bank has placed all the necessary facts and figures at the disposal of decision makers. He said the Bank is not owned by its shareholders, but simply has them. He does not think it is useful to debate the matter publicly, but the Bank will engage with the legislative process to remove private shareholders when it comes before parliament. 

“We will engage with that process with one clear intent: that is, we will protect the mandate and we will protect the independence of the bank as enshrined in the constitution.” 

Following the release of the ANC manifesto, party economic transformation head Enoch Godongwana said the inclusion of comments on the Bank was intended to simply align monetary and fiscal policy. 

In response, Kganyago said this is exactly what the Bank and the National Treasury have always worked together on.  “Where have you been for the past 25 years, where the Treasury and the central bank have been interacting ... because macro-economic policy is fiscal and monetary policy,” he said.

It is also part of the constitution that the activities of the Bank be co-ordinated between the Bank and the finance ministry. 

Kganyago welcomed comments  finance minister Tito Mboweni and President Cyril Ramaphosa made on Wednesday that the independence of the bank was “sacrosanct”.