Banking Association says hell no to Ramaphosa's plan to nationalise

Banking Association says hell no to Ramaphosa's plan to nationalise

The Banking Association of South Africa has put a dampener on all the excitement surrounding President Cyril Ramaphosa's intentions to nationalise the South African Reserve Bank. The Rand has responded to the president's enthusiasm by taking a nose-dive.

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President Cyril Ramaphosa excited numerous South African's when he said the South African Reserve Bank should belong to the people.

However, the Banking Association of South Africa has put their foot down, saying that the independence of the bank should be protected.

According to The Citizen, Cass Coovadia, CEO of the association, reminded citizens that we are fast approaching elections, so exciting promises can be expected.

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President Cyril Ramapgosa told Parliament yesterday that the governing party has taken a crystal clear resolution on the matter, adamant that nationalisation of the Reserve Bank is the way to go.

“What I propose has been done in numerous countries. There are only about six countries in the world which have external shareholding in central banks, and we are one of them,” gathered that the Rand had taken a hit in the wake of the announcement and was trading at R14.33 to the US dollar shortly after.

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Bianca Botes, corporate treasury manager for Peregrine Treasury Solutions, explaining why:

“The markets are perceiving this as undermining the SARB’s independence, which is largely negative for the local currency,”

Ramaphosa and the ANC currently stand in opposition to Lesetja Kgantago, the reserve bank governor, who also feels independence of the institution is paramount:

“The central bank independence allows the SARB to hear what different interest groups have to say, but gives it the policy space to make decisions about inflation that on balance benefit all.”

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