Rand tanks as ANC proposes nationalisation of Reserve Bank

The ANC has proposed that the SA Reserve Bank (Sarb) should be wholly state-owned, according to three people close to the situation, Bloomberg and Moneyweb reports.

The proposal was reportedly approved in a plenary session at the party’s policy conference in Johannesburg on Wednesday. Bloomberg said “the people who asked not to be identified because it hasn’t been made public”

Policy conference decisions will need to be ratified at the party’s national electoral conference in December.

The rand reportedly fell sharply to around R13.35 to the dollar after the news broke.

The bank has private shareholders with no say over policy or the appointment of the governor.

Bloomberg reports: “The Reserve Bank is owned by more than 600 private shareholders who can’t hold more than 10 000 shares each, according to its website. The dividend payable to shareholders is limited to 10 cents per share per year, of a total of R200 000 rand ($14,950) a year, if the central bank makes a profit. The bank’s after-tax profit for the year through March was 1.4 billion rand.”

This proposal was not contained in any of the policy documents discussed at its policy conference, and came as a big surprise to the market.

This follows recommendations by the Public Protecor Busisiwe Mkhwebane’s that the constitution must be amended to allow for a change in the bank’s mandate. She proposed that the Sarb’s mandate should be to promote economic growth rather than its virtually exclusive focus to keep inflation between 3% and 6%.

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