Reserve Bank files court papers to set aside Mkhwebane’s report

The SA Reserve Bank (Sarb) on Tuesday filed an urgent application to the High Court in Pretoria to have Public Protector Busisiwe Mkhwebane’s instructions in her report into the alleged failure by government to recover misappropriated funds from Absa to be set aside.

According to court papers seen by Jacaranda FM News, Sarb governor Lesetja Kganyago argues that Mkhwebane has no power to amend the Constitution to change the mandate of the central bank, let alone to instruct Parliament to do so.

“In the impugned remedial action, the Public Protector instructs Parliament to amend the Constitution to strip the Reserve Bank of its primary function – to protect the value of the currency,” Kganyago was quoted as saying in his affidavit.

Kganyago argued that the remedial action of the public protector’s report had damaging and immediate consequences for the country’s economy, particularly with regards to investor confidence.

Global credit rating agency Standard & Poor’s had warned the country that it could be downgraded further should the government act on Mkhwebane’s remedial action, Kganyago added.

“The ratings agencies have been clear that the independence of the Reserve Bank and its policy framework is one of the strongest pillars supporting the South African economy and underpinning their rating assessment.

“This confidence in the Bank stems directly from the role it plays in achieving and maintaining price stability,” Kganyago said.

The governor also wants the high court to address the “gross overreach” by the Chapter 9 institution.

“With every day that passes without this overreach being put right, uncertainty pervades the markets and the South African economy suffers.”