South African central bank 'will protect financial stability'

Mar 15, 2010

The South African central bank's Chief Economist Monde Mnyande has said the recent global economic crisis has shown the importance of a strongly regulated financial sector.

Mr Mnyande said the central bank's mandate was extended on February 16th to reflect its ambition at maintaining monetary stability.

Reiterating a letter sent by Finance Minister Pravin Gordhan to Reserve Bank Governor Gill Marcus, he stated central banks need a wider and deeper understanding of the banking sector as a whole. The gap between actual and potential economic growth, inflation, employment and the availability of credit should all be taken into account when shaping policy responses.

Speaking at the Leadership Forum of Airports Company South Africa, Mr Mnyande said: "The bank's primary objective is to protect the value of the currency in the interest of balanced and sustainable growth."

Reuters Africa reported that demands have been made on the central bank to reduce its repo rate to create employment opportunities and support economic growth.

During the recession last year, almost 900,000 jobs were lost in the country.