South Africa’s Reserve Bank Stresses Importance of Independence

The independence of the South African Reserve Bank (SARB) is paramount – providing an important check on government-controlled fiscal policy, SARB Deputy Governor Kuben Naidoo stressed on Tuesday.

Reserve Bank Deputy Finance Minister. Source: SABC Youtube screenshot

Naidoo’s comments – made during a public lecture – come following a high-profile row over the role of the bank.

The row has seen a division in the ruling African National Congress (ANC) between those calling for the Reserve Bank to change its mandate to target economic growth and job creation, and those (supporting President Cyril Ramaphosa) rejecting the call.

Naidoo’s comments will further reassure investors that the independence of the SARB is not under threat.


“In the South African context, we do feel an independent bank is an important check in the equation. … Our system has given government the fiscal policy levers,” said Naidoo.

According to Reuters, Naidoo said monetary policy needed to assess whether the economy was “too cold or too hot” and whether fiscal policy was acting normally.

He added that higher levels of debt and higher deficits had introduced risks into the South African economy, like a higher price of capital, which must be considered.

“Monetary policy has to take a broader view than just inflation. It’s an obvious point but it often goes unsaid in macroeconomic discussion,” said Naidoo.

Sources include Reuters.