S&P says compromising Reserve Bank’s independence could affect rating
The comment comes after contradictory statements emerged from ANC senior officials about whether the mandate of the SARB should be expanded.
While vaccines are a priority the government also needs to implement structural reforms.
US-based ratings agency Standard & Poor’s (S&P) said compromising the independence of the South African Reserve Bank (SARB) could undermine what the agency viewed as a key ratings strength, it was reported on Friday.
The agency’s director Ravi Bhatia was quoted as saying: “South Africa’s long-term foreign-currency assessment is BB at S&P, the company’s second-highest non-investment-grade rating.”
The comment comes after this week when contradictory statements emerged from ANC senior officials about whether the mandate of the SARB should be expanded.
ANC secretary-general Ace Magashule said on Tuesday that the ANC’s national executive committee (NEC) lekgotla had decided the government must expand the SA Reserve Bank (Sarb) mandate to include economic growth and employment.
Finance Minister Tito Mboweni and the ANC’s economic transformation sub-committee chairperson, Enoch Godongwana, rejected any interference with the bank’s independence.
Reserve Bank governor Lesetja Kganyago emphasised the importance of maintaining the independence and impartiality of the central bank.
Ramaphosa on Thursday said: “The officials viewed the recent public spats about the mandate of the SA Reserve Bank as not being helpful, and mitigating and undermining the confidence of citizens and of investors … it is our desire for the South African Reserve Bank to be publicly owned. However, we recognise that this will come at a cost, which given our current economic and fiscal position, is simply not prudent.”
(Compiled by Makhosandile Zulu)
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