10. Juni 2009

Mboweni Shrugs Off Union Threat

Reserve Bank governor Tito Mboweni said yesterday that the Bank was "not on a collision course" with trade unions, and their campaign to stop him serving another term should not be taken too seriously.
Mboweni declined to say if he hoped President Jacob Zuma would reappoint him when his second five-year term at the helm of the Bank ended in August.
But he suggested in jokes with journalists he could be around for many more months.
The Congress of South African Trade Unions (Cosatu) has said Mboweni must go as he has not heeded calls to cut interest rates as aggressively as it wants.
"There have been a couple of statements about me. Disregard most of those statements. They are irrelevant and of no consequence," said at a news conference on Zuma's decision to appoint Bank veteran Daniel Mminele as a deputy governor of the Bank, a move seen as supporting the continuity of independent monetary policy.
The left-wing allies of the African National Congress have called for inflation targeting to be scrapped and replaced with goals to boost jobs and economic growth.
Mboweni said he would continue to focus on the Bank's mandate: controlling inflation on an 18- month horizon. "My responsibility is to do the work at hand and not worry about the future."
The governor said he always responded directly to "attacks". He had spoken last week to Cosatu general secretary Zwelinzima Vavi, who promised things would be "sorted out".
Cosatu was not a trade union, but a federation, he said, and hinted he had the support of some of its members. "I don't think you should (see) a situation in which the central bank is on a collision course with the labour movement. It's not true."
He would consider appointing an outsider to the monetary policy committee (MPC) as Mminele's appointment meant that in theory there was still a vacancy. Modern central bank practice was in favour of a model in which an MPC had at least two external members, he said.
"I have to think through this in the next while," Mboweni said.
Asked if the decision might be made before his term ended on August 8 he said: "I need some time, it might be in August, in December or in January next year."
At that point he exclaimed: "Did I say something wrong? Please don't burn me at the stake."
Asked where Mminele's appointment left him he joked: "Standing here in front of you."
Markets are in favour of Mboweni carrying on as governor of the Bank, as he has defended its independence and its inflation-targeting mandate, which is set by the government.
Mboweni said the Bank was "not in the business" of trying to weaken or strengthen the rand.
Some of his remarks on the currency in the past couple of weeks had been misinterpreted. Mboweni had suggested the Bank could "lean against the wind" to counter extreme exchange-rate movements. (AllAfrica)


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