The ruling African National Congress party in South Africa has proposed that the Reserve Bank, the country’s central banking institution should be wholly state owned.
The recommendation has apparently been approved at the party’s annual policy conference in Johannesburg which ends today. Any resolutions taken at this conference do need to be ratified, however, at the national electoral conference in December.
The S.A.R.B. is one of a few central banks that has shareholders and is in a pool containing Swizerland and and Japan. It’s shareholders select 70% of the Bank’s non-executive directors but have no ‘direct’ say over policy.
Despite the fact that this rumoured change may have little to no effect on the day to day running of the bank the market has reacted accordingly. There remains a separation of ownership and control but traders today have viewed this as a further opporunity to sell the Rand. This has seen the currency devalue over 1.5% vs GBP,USD and the EUR today.