SA Reserve Bank Governor Lesetja Kganyago has poured cold water on threats to challenge the bank's mandate saying the it will continue to work to protect the credibility its earned.
"We earned our credibility and we will protect it, because we have a constitutional duty to protect the value of the currency in the interest of balanced and sustainable growth in the republic," said Kganyago.
He was speaking on Thursday following the latest Monetary Policy Committee meeting where a largely unexpected decision was taken to cut the repo rate by 25 basis points. The repo rate now sits at 6.75% while the prime lending rate is 10.25%.
Kganyago firmly stated that the bank was not concerned about any political pressure heading into the meeting, following calls for the bank's mandate to changed.
"We have not been under any political pressure. The message has been very clear, don't attempt it, and we have not seen it," said Kganyago.
"No president or minister has attempted to tell the Sarb how to go about executing its mandate. We were preceded by strong giants of previous governors and anyone who thought they could give an instruction knew that they would faced with significant rebuttal. And I don't think anybody wants to try it this time around either," warned Kganyago.
The governor said the bank was aware that if it should ever lose its credibility it would be far harder to earn it back.
Kganyago's remarks follow the backlash against Public Protector Busisiwe Mkhwebane's CIEX report regarding a "life boat" loan that was given to Bankcorp in the early 1990's, before the bank was purchased by Absa.
Mkhwebane had recommended that the Sarb's mandate be changed by Parliament's Justice and Correctional Services Committee to focus on promoting balanced and sustainable economic growth and ensuring the economic wellbeing of citizens' is protected.
The Sarb is approaching the courts to the review Mkhwebane's recommendations, but the public protector will not be opposing this application.
Mkhwebane said after legal consultation she has decided not to oppose the bank's court action, which will probably lead to her recommendations on the on being scrapped.