Public Protector Busisiwe Mkhwebane has ordered Parliament to amend the Constitution to change the mandate of the Reserve Bank, which would effectively put an end to inflation targeting.
This was among Advocate Mkhwebane’s remedial actions in the CIEX report investigation, which she released at a briefing in Pretoria on Monday.
Mkhwebane has also ordered the Special Investigating Unit to recover more than a billion rand from Absa bank paid as an illegal bailout by the Reserve Bank during apartheid.
Section 224 of the Constitution states that the primary object of the Reserve Bank is to protect the value of the currency in the interests of balanced and sustainable economic growth in the republic.
Advocate Mkhwebane wants this changed as follows:
“The primary object of the Reserve Bank is to promote balanced and sustainable economic growth in the republic while ensuring that socio-economic wellbeing of the citizens is protected.”
The amendment effectively amounts to ending the Reserve Bank's mandate of using interest rates to contain inflation.