The Citizen (Gauteng)

Kganyago sees limit to Sarb’s virus role

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South African Reserve Bank Governor Lesetja Kganyago warned against unrealisti­c expectatio­ns about what central banks can do to soften the coronaviru­s’s impact and said they should remain focused on maintainin­g price and financial stability.

Kganyago’s comments, made in an interview with Bloomberg TV on Monday, came in the wake of calls by senior politician­s for the Reserve Bank to play an enhanced role in bolstering the economy.

Enoch Godongwana, the ANC’s head of economic transforma­tion, suggested that the central bank help finance developmen­t and infrastruc­ture through the creation of a R500 billion fund, while Deputy Finance Minister David Masondo has said he would support direct central bank purchases of government debt.

The Reserve Bank doesn’t respond to political parties as a matter of policy, Kganyago said.

However, as the role that central banks can play globally in aiding economies is discussed “we need to be very clear there are limits as to what central banks can do,” he said.

“It would be wrong to drag central banks into making spending decisions because they are run by technocrat­s and not by public representa­tives.”

With the economy expected to contract the most in at least four decades due to a lockdown imposed to curb the coronaviru­s’s spread, the central bank has cut its benchmark repurchase rate by 275 basis points this year, taking it to the lowest level since it was introduced in 1998.

It’s also relaxed accounting and capital rules to release additional money for lending and more than doubled its holdings of South African government debt, helping to reduce borrowing costs in the domestic bond market.

Even so, the Reserve Bank’s critics accuse it of not doing enough to support the economy and create jobs in a country where almost a third of the workforce was unemployed even before the coronaviru­s struck.

The full impact of monetary policy measures are only likely to filter through during the gradual and phased reopening of South Africa’s economy, and the central bank stands ready to provide additional support as necessary, Kganyago said.

“Inflation is not a problem for the next 12 months,” he said.

The central bank aims to anchor price growth at 4.5% and with the average projected close to the 3% lower bound of the target range this year “that gives us some monetary policy space”, he said. – Bloomberg

Moneyweb

JSE-listed constructi­on group Raubex has reported an “unpreceden­ted” increase in road constructi­on and rehabilita­tion tender activity, with R25 billion in tenders issued in the past six months by stateowned enterprise­s (SOEs) and provincial and municipal road department­s.

“For two years, there was nothing coming to market for the road constructi­on and earthworks division, so at the end of February [2020] we were very encouraged about this,” said Raubex CEO Rudolf Fourie on Monday.

Of the R25 billion in tenders issued, the SA National Roads Agency (Sanral) accounted for R18.85 billion, the Airports Company of South Africa (Acsa) R3.3 billion, provincial department­s R1.87 billion, municipali­ties R692 million and concession­aires R235 million, he said.

Fourie said Raubex was last

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