Economist: Sarb’s role is to create atmosphere credibility and accountability

Commenting on the Mkhwebane’s CIEX report Abedian says it is critical that the central bank is left free of political interference in its operations.

SA Reserve Bank Governor Lesetja Kganyago. Picture: AFP.

PRETORIA – Economist Iraj Abedian has argued that the stability of the currency is critical to maintaining social welfare and political stability.

Abedian made the observation in an affidavit submitted today as part of Absa’s application to be joined as a co-applicant in the reserve bank’s review of the public protector’s CIEX report.

Advocate Busisiwe Mkhwebane released the report in Pretoria a week ago in which she ordered Parliament to amend sections of the Constitution, which set out the central bank’s role.

The economist says in an affidavit that the role of the central bank is to create a monetary policy environment that has credibility, predictability and accountability.

He says to achieve this goal, it is critical that the central bank is left free of political interference in its operations.

Advocate Mnkwebane suggested the reserve bank’s mandate should extend to ensure the socio-economic wellbeing of citizens – and that inflation targeting should be abandoned.

Abedian argues that such inclusion is unnecessary because a natural consequence of a stable currency is social welfare, human well-being and even political stability.