The mandate of the central bank will remain the same, even if it were to be nationalised, says economist Thabi Leoka.
EFF leader Julius Malema has introduced a bill to nationalise the South African Reserve Bank (Sarb) in Parliament this week.
The bill aims to “make the state the sole holder of the shares in the bank” and “provide for the appointment of certain board directors by the (finance) minister”.
Sarb has been privately owned since it was established in 1921.
The shareholders, however, do not have any control over monetary policy, financial stability policy or banking regulation.
Leoka explains the potential impact of nationalising Sarb.
It wouldn't make a difference at all because the mandate wouldn't change.— Thabi Leoka, Independent Economist
The Constitution protects the independence of the Reserve Bank.— Thabi Leoka, Independent Economist
Whether the Reserve Bank is a public entity or a private entity, it doesn't really matter.— Thabi Leoka, Independent Economist
Even if Sarb was nationalised, the government cannot change its mandate. It could only do so if we change the Constitution and that is not easy.— Thabi Leoka, Independent Economist
If it was nationalised, it wouldn't impact on how the Reserve Bank governor is chosen.— Thabi Leoka, Independent Economist
Take a listen to the insightful analysis on The John Maytham Show:
This article first appeared on CapeTalk : 'Even if Sarb was nationalised, govt can't change its mandate'