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Cape Town - Trade union Fedusa has warned the Finance Minister that the debate on inflation targets and the Reserve Bank's mandate is far from over.
In his first Budget speech on Wednesday Minister of Finance Pravin Gordhan made it clear that the central bank would continue pursuing an inflation target of between 3% and 6%.
He also, as expected, stressed the bank's mandate, which includes controlling inflation and protecting the value of the currency.
During a breakfast session on Thursday, Fedusa general secretary Dennis George made it clear to Gordhan that the debates were far from over. He also expressed disappointment that the bank's mandate had not been altered.
Gordhan retorted that the mandate had indeed been changed. He quoted from a letter he had sent the Reserve Bank governor, Gill Marcus, in which he had outlined the bank's mandate.
Among other things, Gordhan mentioned that reliable monetary policy was necessary for the South Africa to create a new growth path and more jobs.
Improved communication with the public on the role of monetary policy in support of growth would improve the efficacy of the bank in carrying out its mandate. That was the change to the bank's mandate, explained Gordhan.
Pointing to the document, he said it contained the words, but union members' distrust was evident.
On Wednesday Gordhan surprised many when, for the first time, the Reserve Bank governor was brought along, as a team, to answer journalists' questions before the budget speech.
Marcus said nothing prevented the Reserve Bank from working together with National Treasury. On the question of the currency's stability, Gordhan said that there was nothing more that could currently be done about it.
Marcus said it was a technical situation affecting the rand, which depended on what happened to other currencies. Policy remained the same.
- Sake24.com
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