The South African Reserve Bank has reaffirmed its independence and constitutional mandate in the wake of comments from the ANC that it’s to blame for the rand’s volatility, and may be influenced by its private shareholders in executing anti-Gupta policies.
Speaking in an interview with Gupta media company, ANN7, Duarte tried to explain recent volatility in the rand, which tanked over 5% on the news that finance minister Pravin Gordhan would be facing charges by the Hawks.
According to Duarte, the rand was not jumping around because of alleged political turmoil involving Gordhan, the Hawks and president Jacob Zuma, but was rather succumbing to other market conditions.
She said that the Reserve Bank, which is privately owned, had a role in the currency’s turbulence as well.
“Our (South African) Reserve Bank needs to cushion the rand but the Reserve Bank itself is privately owned and so we have a difficulty,” she said.
She further criticised the Bank for allowing South African banks to completely block the controversial Gupta family’s business accounts in the country. She said if one family could be targeted and effectively driven out of the country, then black businesses without a white partner stood no chance.
Duarte’s comments brought into question SARB’s independence, and implied that the group was swayed by the undue political or commercial influence of its shareholders.
Responding to Duarte’s comments, the Reserve Bank issued a statement, reiterating its independence, and its mandate as enshrined in the constitution:
We wish to reiterate that the shareholding structure of the SARB has no bearing on any policy decisions that the executive management of the SARB, being the Governor and Deputy Governors, takes in implementing the SARB’s constitutional mandate.
The SARB Act confers original powers on the Governor and Deputy Governors with regard to the management of the SARB and execution of policy.
The Governor and Deputy Governors take decisions independently, without fear, favour or prejudice. Monetary policy decisions are taken by the Monetary Policy Committee (MPC), which comprises the Governor, the three Deputy Governors, and two officials of the SARB, and is chaired by the Governor.
Neither the Board nor the SARB’s shareholders have any say or influence over policy decisions. The board of directors is responsible for the governance of the SARB.
The group explained that the composition of the SARB’s Board is determined as follows:
- The President of the Republic of South Africa, after consulting the Minister of Finance and the South African Reserve Bank Board of Directors, appoints the Governor of the SARB (who also chairs the Board) and three Deputy Governors (executive directors of the Board).
- In addition, the President, also after consultation with the Minister of Finance, appoints an additional four non-executive directors of the SARB.
- The remaining seven non-executive directors are elected by the SARB’s shareholders following a rigorous pre-qualification process, including evaluation of nominees by a Panel established in terms of the SARB Act.
The SARB Act requires each of the directors of the SARB to be a fit and proper person, with appropriate skills and experience, it said.
Earlier in the year, following a decision by four major retail banks in South Africa to block the Gupta family’s business accounts, minister of mineral resources, Mosebenzi Zwane, suggested that the Reserve Bank be stripped of its authority to licence financial institutions, and that the task be given to the minister of finance.
Zwane was implicated in the Guptas’ business dealings, specifically by helping the family secure the Optimum coal mine through a deal with Glencore. He denied any role in the business dealings, however.
Several government and financial insiders confirmed that they had seen a memo from Zwane with the proposal.