The primary mandate of South Africa’s central bank is price stability, its governor said on Wednesday, after the South African Communist Party said the bank’s mandate should be expanded to explicitly include job creation.
The divergent statements echoed a heated argument among senior officials over whether its mandate should be expanded, in a debate that has rattled markets.
“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,” governor Lesetja Kganyago said.
“The independence and competence of the Reserve Bank all come from the constitution.”.
Senior officials of the governing African National Congress (ANC) party contradicted each other on Tuesday over whether the party had decided to expand the bank’s mandate to include boosting employment and economic growth alongside inflation-targeting, hours after data showed the country’s worst economic contraction in a decade.
The SACP, a key ANC ally, waded into the debate on Wednesday by saying the bank’s mandate should be expanded. It said in a statement: “The mandate of the South African Reserve Bank must explicitly include employment growth targeting – with a consequential amendment to the Reserve Bank Act,” the SACP said in a statement.