Clarifications on a SAPA report - South African Reserve Bank
There are a number of extremely unfortunate and misleading distortions in the SAPA report of the discussions that took place today before the Parliamentary Finance Committee (see here). The appearance before the Committee lasted three and a half hours and a wide range of issues were discussed in a very constructive meeting.
I will only address two issues:
A) The question of the SARB's view of the role of shareholders in relation to ownership of the Bank was raised. The response was that the central bank in any country has a unique place and role. It is a national asset that acts in the interests of the country as a whole, and did not act with a profit motive. In fact in certain circumstances its decisions may require actions that result in a loss of income. It is unfortunate that there are a number of shareholders who, through their actions, do not recognise these responsibilities.
They are claiming that the reserves of the SARB should be distributed to shareholders, and talk of nationalisation to effect a change of ownership that would then create the circumstances for this to happen. To benchmark the value of their claim, they are offering SARB shares for sale at R4,600 per share - the shares were issued at R1 each, and their current trading price is R12,50. What was said was that allowing them to attempt to set the agenda for a debate on nationalisation with such self interest and greed motives was nuts.
B) the statement that I am opposed to accumulating reserves is the exact opposite of our position. In an extensive discussion on the exchange rate, it was said it was not appropriate to target a specific exchange rate as there are many factors that have to be taken account of, including inflation and the deep pockets that would be required to defend such a stance. However, we are very aware of the impact of the exchange rate. The fact that we do not target the exchange rate does not imply that we are not concerned about its volatility. Furthermore, we will continue to accumulate reserves whenever possible.
Statement issued by Gill Marcus, Governor of the South African Reserve Bank, February 23 2010
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