The Reserve Bank will not bow to any pressure, be it political or from the private sector, governor Lesetja Kganyago insists.
At the Bank’s annual ordinary general meeting on Friday, Kganyago said: "The South African Reserve Bank has been in the spotlight for the past few weeks, mainly for the wrong reasons."
Public Protector Busisiwe Mkhwebane, in her report on the Absa/Bankorp bail-out in June, made a recommendation that Parliament amend the Constitution to change the Bank’s mandate, from inflation targeting to ensuring the socioeconomic wellbeing of South Africans.
Kganyago said the Bank would be heard on the matter in the high court next week.
He said apart from the legality of the issue, and its relevance to the original complaint under investigation, "these developments have opened the door to a debate about the appropriateness of our mandate, and of the inflation-targeting mandate specifically".
He reiterated the Bank’s constitutional mandate to protect the value of the currency.
"Price stability, or the protection of the value of the currency, is a core function of central banks. I know of no central bank that does not have this mandate," he said, adding that central banks were best equipped to carry out this function.
"It would be counterproductive to divert the Bank’s policies away from these important socioeconomic objectives in order to try and achieve outcomes over which the Bank has little or no influence."
He also addressed the issue of the Bank’s private shareholding, amid calls for it to be nationalised.
"In the Reserve Bank, private shareholding does not impart the same rights and benefits that shareholders in private companies have," Kganyago said.
"The notion of a central bank as a public policy institution, with the main goal of promoting monetary and financial stability in the interests of the general public, is remote from the traditional concept of a commercial company with a profit motive."
The Reserve Bank will brief Parliament on Tuesday about its economic outlook, and about the role and mandate of the Bank - including how it responds to the public protector’s remedial action - and its annual report.
The Bank’s court hearing is also on Tuesday.
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