S.Africa’s rand weakens 1.5 pct after watchdog comments over cenbank

South Africa’s rand fell more than 1.5 percent on Monday after Public Protector Busisiwe Mkhwebane recommended changes to the constitution to force the central bank to promote economic growth rather than currency and price stability.

By 1222 GMT, the rand was trading 1.44 percent weaker to the dollar at 12.9900, having hit 13.0075.

Mkhwebane said at a news conference that the primary objective of the South African Reserve Bank should be to promote balanced and sustainable economic growth, rather than to target inflation, as it is now.

It is unclear why Mkhwebane, a constitutionally mandated anti-corruption watchdog, should have made the comments, which alarmed currency traders.

“They want to initiate changes to alter the primary objective of the Reserve Bank. Some of the suggestions being to remove the reference to protect the value of the currency and all this has caused a knee-jerk reaction,” said Andre Botha, Treasury One currency dealer.

(Reporting by Tanisha Heiberg and Olwethu Boso; Writing by James Macharia; Editing by Ed Cropley)

Related Content

Investec on why the Reserve Bank should print money as part of COVID-19 response

The COVID-19 lock-down is expected to cost South Africa’s economy over one trillion rand in lost output. One of the ways to fund South Africa’s recovery could be for the Reserve Bank to follow its peers globally and print money – a move, which up to now, the bank has been reluctant to do. That’s the view of Professor Brian Kantor, Chief Strategist & Economist at Investec Wealth & Investment.

South African economy to shrink 4.9% in 2020, SARB to cut rates in May – Poll

South Africa’s economy will contract sharply this year as activity is hit by the coronavirus outbreak, despite expectations the central bank will cut interest rates again in May, a Reuters poll found on Monday.

Why SARB should step in to save SA companies that are too big to fail

While some say South Africa’s government has moved swiftly in tackling the coronavirus pandemic, others say it should be doing more. Interventions by the Reserve Bank could also be increased to include rescuing big companies deemed too big to fail. That’s according to economists, including Alexander Forbes, Chief Economist, Isaah Mhlanga who joins CNBC Africa for more.

SARB cuts rates by 100 basis points to record low

The South African Reserve Bank has cut the repo rate by 100 basis points which leaves the repo rate at 4.25 per cent per annum. The May 2020 meeting of the MPC was moved earlier and took place today. The announcement comes a few weeks after the MPC cut the repo rate by 100 basis points in March as well. This is what the SARB governor Lesetja Kganyago had to say.

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

More from CNBC Africa

BFA Asset Management on Angola’s annual budget outlook

Chinese debt relief given to emerging markets that are facing the pressure from the Covid-19 pandemic may pose some threats to countries that already have vast amounts of debt owing to facilities. Joining CNBC Africa to unpack debt relief implications for Angola and Mozambique and as well as the Angolan annual budget outlook is Rui Oliveira, CEO at BFA Asset Management.

L’Oreal’s Hlengiwe Mathenjwa on how Covid-19 has impacted the beauty & skincare industry

The 111 year old French beauty giant L’Oreal has appointed Hlengiwe Mathenjwa as the new director of its largest manufacturing facility in the Africa and Middle East region. This appointment comes amid the Covid-19 storm that is ravishing most industries globally, Hlengiwe Mathenjwa joins CNBC Africa for more.

COVID-19 lock-down: How the Gauteng government plans to safely reopen schools

Since the gradual opening of the economy after lock-down there has been a sharp incline of COVID-19 cases. The government has the task of balancing the health of the people with keeping the economy going and opening the schools. How is the Gauteng provincial government helping? The Gauteng MEC for education is laying out the plans to welcome back school goers....

COVID-19: Rwandan bound containers held at Mombasa port

Over 2000 Rwanda bound containers of goods have been held in Kenya and Tanzania due to the delays in cargo clearance. According to Rwanda's Private Sector Federation, the move contradicts a comprehensive regional COVID-19 approach that was agreed on in dealing with the challenges of the virus on the cross-border businesses between member states. Economic Analyst, Ted Kaberuka joins CNBC Africa for more.

Partner Content

Maktech’s Godwin Makyao: Now Is A Time of Entrepreneurial Opportunity in East Africa

As an executive decision-maker in both the telecommunications and tourism industries, Godwin Makyao could not have experienced a more diverse set of...

Sanlam launches urgent job-preservation initiative in response to COVID-19

Sanlam Investments is responding to the COVID-19 pandemic through large-scale support of the recovery of South African companies, from small enterprises to...

Trending Now

Kenyan sports minister Amina Mohamed to bid for top WTO job

The Geneva-based body is seeking a replacement for Brazil’s Roberto Azevedo who is stepping down a year early at the end of August at a critical juncture for the trade watchdog.

COMMENT: COVID_19 – Crazy times call for crazy measures

On the 10th of September, 2001 – you could walk up to an airline counter, buy a ticket with no ID, walk straight through to the gate, get on a plane, pop into the cockpit to say hi to the captain, and within reason do what you wanted.

How COVID-19 could condemn millions of Africans into extreme poverty

The African Development Bank says an additional 49 million Africans could be pushed into extreme poverty by the Covid-19 pandemic and its aftermath. This was in the updated forecast of the Africa Economic Outlook, where they expect Central Africa and West Africa to be the hardest-hit regions. Kayode Akindele, Partner at TIA Capital joins CNBC Africa for more.

Implement substantive reforms, Paris Club creditors tell Zimbabwe

HARARE (Reuters) - Zimbabwe should implement sustainable political and economic reforms and successfully complete an IMF monitoring programme in order to normalise...
- Advertisement -