Mboweni warns against Reserve Bank meddling

Former Reserve Bank governor Tito Mboweni is warning against the public protector’s proposed changes to the central bank’s constitutional mandate, saying it could have massive undue consequences for the country.

Busisiwe Mkhwebane’s CIEX Report, on the investigation into the central bank’s bailout of Bankorp between 1985 and 1995, controversially recommends con- stitutional changes to the Reserve Bank’s mandate.

The public protector said the Reserve Bank had not been aggressive enough in recouping monies allegedly fleeced from the state by businesses during apartheid.

Mkhwebane wants Absa, which bought Bankorp in 1992, to repay R1.25 billion to the national fiscus.

The Reserve Bank said yesterday it would bring an urgent court application to have Mkhwebane’s proposed remedial action reviewed and set aside.

“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 has consulted its legal team and has been advised the remedial action prescribed by the public protector falls outside her powers and is unlawful,” the bank said.

In a Facebook post, Mboweni cautioned that central banks were “very important and sensitive institutions” and that he considered it unwise to meddle with their independence “at the slightest political provocation”.

He added: “This is too fundamental to be treated this easily.

The impact of any proposed changes are huge for our country.”