For a country that has been awash with economic instability for the past 10 years, it is a sobering thought that one institution – the Reserve Bank – has sailed straight and remained on course.
This institution has been mandated to maintain strict monetary policy – its primary focus is inflation targeting and maintaining the value of the nation’s currency.
It does this largely through the setting and regulation of interest rates.
In the past five years, the Reserve Bank has endured regular policy attacks from a populist faction in the governing party and other elements on the left calling for its nationalisation (which in practical terms would have no effect on its mandate) and more recent calls for it to engage in “quantitative easing” (which is another way of saying the central bank needs to print more money).
Standing up to these calls and rebutting them is the governor – Lesetja Kganyago – who this week was reappointed for a second term at the helm of this institution.
A straight-talking, no-nonsense pragmatist, Kganyago has kept his hand firmly on the tiller of the ship, guiding policy and keeping the country’s interest rate regime firmly in line with its inflation objectives.
While not rejecting the need for the Reserve Bank to play a greater role in the country’s economy, he has firmly distanced himself from the calls for its mandate to shift.
Internationally, Kganyago’s insight and strength were recognised last year when he was awarded governor of the year at the Central Banking Awards.
In a time of global economic flux, it is crucial that a country’s central bank reflects a determined policy certainty and an unwavering commitment to fulfil its mandate regardless of political pressure. For this, we thank Kganyago’s leadership of this institution.