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On The Record: South African Reserve Bank mandate – PT1

The last few days have been dominated by a discussion sparked by the announcement by the ANC’s secretary general Ace Magashule, that the party’s NEC Lekgotla agreed that the inflation targeting mandate of the Reserve Bank should be changed.
Hours after his statement, the head of the ANC’s economic transformation committee Enoch Godongwana told the SABC that no such decision had been made, and that the legkotla did not have the power to change an ANC resolution taken at a conference.
Then, this afternoon, the ANC released a statement on behalf of its top six national leaders, saying that the policy has not changed.
In the meantime, there has been a huge discussion about whether the mandate should change. Currently, the bank uses interest rates, the rate at which it lends money to other banks to target inflation, if it lowers those rates, you will have more money in your pocket to spend, which leads to higher inflation.
If it raises interest rates, you have less money to spend, and inflation is thus controlled. We will speak to two people who have different views on this tonight.
Duma Gqubule is the founding director of the centre for economic development and transformation, he must speak for himself, but I’m expecting that he will argue that the mandate of the Reserve Bank should change.
Gina Schoeman is an economist at Citi Bank, I’ve asked her to take the position that the bank’s mandate should stay as it is.
But first, let’s take a look at what the ANC’s ANC’s economic transformation committee Enoch Godongwana

For more news, visit: sabcnews.com

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