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Kganyago says Sarb's primary mandate is price stability

Central bank Governor Lesetja Kganyago made the comments as senior officials argued over whether its mandate should be expanded.

South African Reserve Bank Governor Lesetja Kganyago. Picture: AFP

JOHANNESBURG - The primary mandate of the South African central bank is price stability, central bank Governor Lesetja Kganyago said on Wednesday, as senior officials argued over whether its mandate should be expanded.

“The Constitution outlines the primary mandate of the Reserve Bank, being to protect the value of the currency in the interests of balanced and sustainable growth,” Kganyago said.

“The independence and competence of the Reserve Bank all come from the Constitution.”

This follows Finance Minister Tito Mboweni response to ANC secretary-general Ace Magashule. Magashule told journalists the national executive committee (NEC) had resolved to expand the mandate of the central bank to not only be set on price stability but also include growth and employment.

“What is this obsession with the South African Reserve Bank? I am now reaching a point of total exasperation with these continued attacks and obsession with the South African Reserve Bank. I have explained on many occasions the purposes and functions of the South African Reserve Bank. What is the issue?”

He added: “I don’t understand why the obsession about the central bank. ... That mandate is very clearly articulated in the Constitution,” Mboweni said.

“Why are we saying things we know are going to destabilise the market?”

The ANC's economic transformation head Enoch Godongwana, meanwhile, also weighed in, saying in a statement that no decision was made to change the central bank's mandate. Godongwana echoed Mboweni's view that the Sarb must protect the currency in the interest of sustainable economic growth.

Godogwana has re-iterated that the party has not resolved to amend the mandate of the reserve bank.

He says the lekgotla which ended on Sunday did not touch on the subject of the bank’s mandate.

“The document that I’ve from Lekgotla does not say so. We never talked about the reserve bank; we said something which was said from 1992, no change, micro-economic framework and employment issue.”

Meanwhile, the South African Communist Party has also weighed in on the issue reaffirming its stance that the mandate of the bank must include employment growth targeting.