President Cyril Ramaphosa looks on as he attends a Presidential Youth Dialogue on June 19 2019, at parliament, Cape Town. Picture: AFP/RODGER BOSCH
President Cyril Ramaphosa looks on as he attends a Presidential Youth Dialogue on June 19 2019, at parliament, Cape Town. Picture: AFP/RODGER BOSCH

The mandate of the SA Reserve Bank will not be changed, President Cyril Ramaphosa said on Thursday in parliament. 

“Today we reaffirm this constitutional mandate, which the Reserve Bank must pursue independently, without fear, favour or prejudice,” he said during his state of the nation address (Sona) in the National Assembly. 

The president said the rising prices of goods and services was eroding the purchasing power of South Africans, especially the poor, and that inflation undermined the competitiveness of the country's exports and import-competing firms, putting industries and jobs at risk.

LISTEN: The State of the Nation address in full

It was for these reasons that the Constitution mandated the Bank to protect the value of SA's currency in the interest of balanced and sustainable growth, he said. 

Ramaphosa's comments follow the confusion over the ANC’s stance on the mandate and ownership of the Reserve Bank in the past few weeks.

Ramaphosa recently had to walk back on comments made by ANC secretary-general Ace Magashule that the party wanted the Bank’s mandate expanded and wanted to explore quantitative easing measures, to address intergovernmental debts to make funds available for developmental purposes.

Magashule’s comments came on the same day that Statistics SA announced that the economy had had its biggest contraction since the depths of the global financial crisis. The comments on the Bank created uncertainty in the markets and led to the rand slumping.

The president met the board of the Bank and governor last Friday, where vacancies at the SARB were discussed. 

Continuity at the Bank is important, especially at a time when it has become a proxy battle between warring factions in the ANC.

On Thursday night, Ramaphosa said the Constitution required that there be regular consultation between the Reserve Bank and the minister of finance to promote macroeconomic co-ordination, all in the interests of employment creation and economic growth.

quintalg@businesslive.co.za