The South African Reserve Bank Governor Lesetja Kganyago is delivering a keynote address at the University of Stellenbosch
Reserve Bank governor, Lesetja Kganyago, says an independent central bank is critical to fulfill its mandate
of protecting the value of the country’s currency.
Kganyago was delivering the keynote address at a public lecture hosted by the University of Stellenbosch in Cape Town on Wednesday, under the theme: “Independence & Policy Flexibility: Why should central banks be independent?”
He says the central bank’s duty is to prevent runaway inflation. “It is possible that you could have a central bank that is vigorously independent, that pursues its mandate without fear or favour, but is in the hands of government.
“Actually most central banks are owned by governments. Or you could have a central bank that has participation of private shareholders, and I’m choosing this carefully because the SARB is not owned by private shareholders, it just happens to have private shareholders. They are akin to preference shareholders because they do not have a say in the running of the institution, neither do they have a say in the policy that South Africans have. So the debate about nationalisation is not so much about the ownership because 90% of the profits, after they have paid dividends and taxes and provided for our own reserves as a central bank, the profits go the government, so the correct description would be the removal of private shareholders rather than the nationalisation of the reserve bank,” Kganyago explained.
