Minister of Finance Tito Mboweni with SA Reserve Bank Governor, Lesetja Kganyago. Picture: Tito Mboweni/Twitter
Minister of Finance Tito Mboweni with SA Reserve Bank Governor, Lesetja Kganyago. Picture: Tito Mboweni/Twitter

Mboweni, Kganyago agree on defined roles between Treasury and SARB

By ANA Reporter Time of article published Jul 4, 2019

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Johannesburg - Finance Minister Tito Mboweni and SA Reserve Bank (SARB) governor Lesetja Kganyago on Thursday reaffirmed the independence of the central bank and that the National Treasury communicates when necessary on fiscal and economic policy. 

This as there have been mixed messages about the ruling party's conference resolutions and the expansion of its mandate beyond price stability to include growth and employment. 

Mboweni and Kganyago met on Thursday afternoon as they routinely do, in line with section 224 (2) of the Constitution.

In a joint statement, they said that the effective coordination of fiscal and monetary policy was a central pillar of good macroeconomic management and policy certainty. 

They said such coordination reduced any potential or unnecessary uncertainty around the formulation, decision making and implementation of the macroeconomic policy framework.

The finance minister and the governor said that the roles and responsibilities of both the National Treasury and the SARB, in both the execution and communication of its functions and policies, were well defined. 

"The National Treasury has always respected the independence of the SARB, and communicates when necessary on fiscal and economic policy," the statement read.

"The ministry of finance would under normal certain circumstances not comment on the monetary policy stance or interfere in monetary policy decision making or decisions of the SARB. That is the role of the SARB. The SARB does not comment on fiscal policy and tax matters."

The statement continued to say that SARB, as an independent central bank of South Africa, ensures that it takes full responsibility for assessing the impact that its policies have on inflation and the economic prospects of the country.

"This is a standard practice globally which ensures that there is no confusion and any misleading signals about both our assessment of economic developments and the role our specific institutions play in macroeconomic coordination, which includes the exchange rate policy," it said.

"Our exchange rate policy is that we want to have a stable and competitive exchange rate. This practice does not mean that the two institutions act in collusion and isolation but in coordination."

African News Agency (ANA)

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