South Africa’s anti-graft watchdog must meet a high court deadline in a case about the central bank’s mandate to avoid creating market instability, the bank said.
Market stability is politically sensitive in South Africa because ratings agencies downgraded the country’s debt in April and S&P Global and Moody’s have warned pressure on bank independence could spark a deeper cut.
Public Protector Busisiwe Mkhwebane in June proposed changing the bank’s mandate to focus on promoting growth rather than currency and price stability.
The proposal sparked a plunge in the rand and attracted criticism from Finance Minister Malusi Gigaba. It was quashed by Pretoria High Court, which said the proposal lacked merit and was ill-considered because the bank’s mandate is fixed in the constitution.
The court then invited Mkhwebane, employed to ensure proper conduct in public office, to respond to its ruling and the hearing was expected to start on December 5.
Mkhwebane requested to file her answering affidavit in January 2018. In an affidavit last week, she said this would allow her new lawyers to acquaint themselves with the case since her previous lawyers withdrew.
In an affidavit the central bank said a postponement would adversely impact financial stability given the concerns of ratings agencies about bank independence.
“Ratings agencies regard the role of the Reserve Bank and its stability as a key indicator of stability in the market. The attack on the Reserve Bank in the report creates uncertainty,” the bank’s lawyers said, adding Mkhwebane’s reason for a postponement was neither “candid nor adequate”.
Fitch, S&P Global and Moody’s downgraded the country’s debt following President Jacob Zuma’s abrupt firing of respected finance minister Pravin Gordhan in March. S&P Global and Moody’s are due to announce ratings decisions on November 24.
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