Big change for Reserve Bank interest rate committee 

Lesetja Kganyago

South African Reserve Bank (SARB) Governor Lesetja Kganyago said a process is underway to appoint a Deputy Governor and up to two more Monetary Policy Committee (MPC) members.

Kganyago said this in response to questions at the SARB MPC Press Conference on 25 January. His comments came after the resignation of Kuben Naidoo, a deputy governor of the SARB.

Naidoo tendered his resignation almost 18 months before his second five-year term was due to end in March 2025 and only a few months before Kganyago’s term was set to end.

The resignation led to fears of instability at the SARB and a potential deadlock at the Bank’s MPC.

However, these fears subsided at the MPC’s January meeting, as five members were present, with Dr David Fowkes temporarily stepping in for Naidoo.

“In November, many of you were asking the questions, and you were worried that we would have been reduced to four. Well, we are back to five. Five is better than four,” Kganyago said.

He reassured the country that the appointing authority for Naidoo’s replacement, the Presidency, is working on finding a replacement.

“We are told that the President is applying his mind. Once his mind has been applied, he will tell us who he is replacing Naidoo,” Kganyago said.

On the expansion of the MPC, the Governor said the committee’s terms of reference state that it can include up to four staff members of the Reserve Bank in the MPC. 

In addition, he said it always makes sense to have an odd number so the Governor does not have to exercise two votes in the case of a deadlock in the voting process.

The maximum size of the MPC is eight people, but since an uneven number is preferred, Kganyago said they are looking to expand to seven members.

“The more, the better. At the moment, we are five. When the President appoints a Deputy Governor, we will go to six, and we will continue to search for another person to take it to seven,” he said.  “But six is better than five.”

North-West University Business School economist Professor Raymond Parsons said this is a positive development, as it brings the MPC up to its full strength and more in line with global best practices.


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