The ANC’s national executive committee (NEC) appeal to Enoch Godongwana, minister of finance, to urgently meet with the Reserve Bank on interest rate increases will not be followed up.
The minister said on Tuesday that he did not intend to meet with the Reserve Bank about this.
“No, I am not in discussion with the Reserve Bank on that matter,” Godongwana said on Tuesday in an interview with Bloomberg Television at a summit of G20 finance ministers and central bank governors in India.
“The Reserve Bank in South Africa is independent in terms of the Constitution and its purpose is defined as that of protecting the value of the currency in the interests of balanced growth.
“The bank is expected to be in consultation with the minister responsible for finances, but this does not mean that the minister responsible for finances can prescribe what to do,” says Godongwana.
RNews earlier reported that the NEC had asked Godongwana to urgently meet with the Reserve Bank on ways to manage inflation without raising the interest rate again.
Fikile Mbalula, secretary general of the ANC, said on Sunday that the NEC is well aware that the Reserve Bank has a mandate to pursue price stability in the interests of balanced growth. However, the committee does not believe that the “new trend” of interest rate increases is in the best interest of balanced growth.
The Reserve Bank has increased the repo rate ten times since November 2021 by a total of 475 basis points. According to the bank, an increase in the repo rate will stop inflation and prevent the rand’s value from falling further.
However, the NEC is deeply concerned about continued interest rate increases as millions of South Africans are now financially strapped.
The Reserve Bank will meet again on Thursday on the interest rate.