HANNA ZIADY: Attacks on Reserve Bank show acute lack of understanding of its mandate
The rhetoric surrounding the Bank signals the 'post-truth' trend in SA’s political discourse
Attacks on the mandate of the Reserve Bank demonstrate an acute lack of understanding of how the Bank, and monetary policy generally, work. Of even greater concern, those spearheading the attacks either don’t realise that their views are misinformed or simply don’t care, as a quick glance at my Twitter timeline suggests. Opinions touted on social media, including by some within the governing alliance, would have you believe that SA’s low-growth malaise is somehow the fault of the Bank. While the Bank’s constitutional mandate is indeed to “protect the value of the currency in the interest of balanced and sustainable economic growth”, to think that it can somehow manufacture that growth is to attribute to the Bank powers it simply does not have. Monetary policy, the purview of the Bank, is powerless to tackle the real inhibitors to growth and job creation, such as corruption and poor educational outcomes. The best thing the Bank can and does do for the economy is target inflation, whi...
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