Publication Date: 07/07/2017

The Banking Association South Africa notes the recent statements around the South African Reserve Bank made during the African National Congress Policy Conference. It is in the interest of all South Africans — particularly the poorest of the poor, who bear the brunt of financial instability — that the independence of the SA Reserve Bank be protected.

Chairperson of the ruling party’s economic transformation commission, Enoch Godongwana, stated that during the conference, the party had resolved to keep the bank independent, but to investigate the possibility of changing its ownership.

While the shareholding of the SA Reserve Bank is not a critical issue, the independence of the bank is of paramount importance. The Reserve Bank is South Africa’s central bank, and it plays a vital role in formulating and implementing monetary policy, supervising the banking system and managing reserves.

The Reserve Bank is the lender of last resort and able to provide liquidity to the market in the event of financial shocks. As such, it is fundamental to maintaining confidence in our country’s financial system and the South African economy as a whole.

The role of the Reserve Bank and its independence are protected by the Constitution and it is crucial that this independence be preserved. The bank’s current mandate has been to maintain price stability and to enable growth.

This mandate and the inflation targets are decided in consultation with government, but the instruments to achieve these are decided independently whether most Reserve Bank shares are held by the state or by private individuals should have no bearing on this.