Kganyago reaffirms independence of Sarb

Governor Lesetja Kganyago announced earlier on Thursday that the repo rate would remain unchanged at 6.75%.

FILE: South African Reserve Bank Governor Lesetja Kganyago. Picture: AFP.

JOHANNESBURG - South African Reserve Bank (Sarb) Governor Lesetja Kganyago has re-affirmed the independence of the bank, saying those appointed serve a specific term which is protected by the Constitution.

He announced earlier on Thursday that the repo rate would remain unchanged at 6.75%.

However, Kganyago was also asked whether he feared direct government interference at the bank.

“Reshuffles take place at the Union Buildings, we don’t reshuffle people here.”

Kganyago says it would be a mistake for anyone to try and interfere with the reserve bank.

“Even if we can say we can reshuffle just to intimidate them, if there was to be such an attempt, I can tell you that you have resistance coming because we’ve got a constitutional obligation.”

The governor has also cautioned against the effects of a weaker rand and low growth but says the Monetary Policy Committee was unanimous when deciding to keep the repo rate unchanged.

Kganyago says the bank will monitor the economy closely over the next few months.

He says the rand has lost significant value over the past several weeks but has shown signs of recovery.

“The rand recorded a weak point of around R14,55 against the US dollar in mid-November but has recovered somewhat since then.”

He says the inflation has been kept in check.

“The average forecast for 2017 is unchanged at 5.3%.”

However, Kganyago has cited a number of concerns facing the economy, including possible downgrades, concerns over the African National Congress elective conference and rising oil prices.