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Lesetja Kganyago: Sarb independence not under threat

Concerns had been raised around meddling after Busisiwe Mkhwebane recently recommended a change in the bank's mandate.

FILE: Reserve Bank Governor Lesetja Kganyago. Picture: Renart Toerien/EWN.

JOHANNESBURG – South African Reserve Bank (Sarb) Governor Lesetja Kganyago has moved to assure the nation that the bank's independence is not under threat.

He made the comment while announcing the Monetary Policy Committee's (MPC) decision to reduce the repo rate.

“The MPC has decided to reduce the repurchase rate by 25 basis points with effect from 21 July 2017 to 6.75% per annum.”

Concerns had been raised around meddling after the Public Protector Busisiwe Mkhwebane recently recommended a change in the bank's mandate.

Earlier this month, Advocate Mkwebane back tracked, saying she would not be opposing the central bank's application to have her finding's overturned.

Kganyago, who has launched legal proceedings to counter the challenge, said the central bank remains independent and has not come under any pressure to cut rates.

The Reserve Bank has unexpectedly cut its benchmark lending rate for the first time in five years, citing weak growth and easing inflation.

Although this is good news for indebted consumers, the Governor has stressed there are a number of concerns still looming.

The MPC has further revised the country's growth outlook from 1% to 0.5%.

That decision was brought on by the recession the country entered in the first quarter, a negative growth quarter Sarb says took them by surprise.

Kganyago says they are also concerned about the future impact of declining Business Confidence which is at levels last seen during the 2009 financial crisis.

(Edited by Winnie Theletsane)