To utilise quantitative easing… you should be experiencing deflation… [or] interest rates so close to zero they become ineffective… South Africa does not meet these conditions!— Lesetja Kganyago, Governor - South African Reserve Bank
The ANC has agreed to expand the mandate of the South African Reserve Bank (Sarb) to focus on development and job creation, according to secretary-general Ace Magashule.
Magashule says the party is exploring quantitative easing – in essence, creating money out of thin air.
Finance Minister Tito Mboweni, however, immediately took to social media to contradict Magashule.
The ruling party’s economic transformation head Enoch Godongwana was also quick in slamming Magashule, saying the ANC has not decided to change the Sarb’s mandate.
Sarb Governor Lesetja Kganyago too was scathing in his response to Magashule’s statement, reiterating that the Sarb’s primary mandate of “protecting the value of the rand in the interests of balanced and sustainable growth” is outlined in the Constitution.
Kganyago’s first term as Governor ends in November 2020.
He has made himself available to serve another five-year term.
Credit rating agencies have cited Kganyago’s leadership as an institutional strength for South Africa.
The Money Show’s Bruce Whitfield interviewed Kganyago, Peter Attard Montalto (Head of Capital Markets Research at Intellidex) and Mpumelelo Mkhabela (Political Analyst with the Department of Political Sciences at Unisa).
Listen to the interviews in the audio below (and scroll down for more quotes from it).
You can’t embark on quantitative easing when you don’t have savings!— Lesetja Kganyago, Governor - South African Reserve Bank
There is an alliance between the SACP and others in the ANC who want access to the central bank…— Peter Attard Montalto, Head of Capital Markets Research - Intellidex
The reserve bank will get on with its job diligently… but this isn’t going to go away… The market is waiting for a firm statement from the President…— Peter Attard Montalto, Head of Capital Markets Research - Intellidex
The fact that the faction was defeated at Nasrec… it’s very difficult for them to implement it now…— Mpumelelo Mkhabela, Political Analyst - Unisa
It’s not even a question of rational debate... it’s just false statements…— Mpumelelo Mkhabela, Political Analyst - Unisa
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