Cape Town – The South African Reserve Bank (SARB) said Public Protector Busisiwe Mkhwebane’s remedial action seeking Parliament to change the Constitution regarding the bank's mandate to protect the value of the rand “falls outside her powers and is unlawful”.
“The Reserve Bank has been advised to bring urgent review proceedings to have the remedial action set aside,” the SARB said in a statement on Tuesday. “The Reserve Bank has resolved to do so.
"The Reserve Bank has consulted its legal team and has been advised that the remedial action prescribed by the Public Protector falls outside her powers and is unlawful.”
Mkhwebane on Monday released a report on the alleged failure to recover R1.125bn in "misappropriated funds" in the Bankorp lifeboat investigation. She wants Absa, which bought the bank in the 1990s, to pay back the money. The bank has disagreed with this finding.
She ordered remedial action directing Parliament to effect a constitutional amendment to the Reserve Bank’s powers.
“This had an immediate and negative impact on the markets and the exchange rate of the rand,” the SARB said.
The rand slid by about 1.5%, breaching R13 to the dollar on Monday.
“The amendment would, if effected, strip the Reserve Bank of its key competency to protect the value of the currency and the well understood role that central banks play in securing price stability.
"The remedial action proposed will have a negative impact on the independence of the Reserve Bank.
“The Reserve Bank acts in terms of its constitutional mandate in the interests of the welfare of all South Africans.”Follow @lecordeur
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