LATEST FINANCIAL NEWS

Nationalising the Reserve Bank a ‘R200 000 discussion’ – Kganyago

[ad_1]

Nationalising the stock held by the private shareholders in the SA Reserve Bank is a “R200 000 discussion”, not a multi billion-rand question, according to the central bank’s governor Lesetja Kganyago.

Kganyago was speaking at the bank’s annual general meeting in Pretoria on Friday.

At the end of his opening address, the governor noted that private shareholders own a total of 2 million shares in the bank. The highest dividend allowed by law is 10 cents a share, and only if the bank makes a profit. This means the bank can pay out R200 000 in dividends per year in total.

No shareholder or associate may hold more than 10 000 shares, said Kganyajo, meaning the highest annual dividend per private shareholder is R1000 per year.

Kganyago, who was appointed to a second term, reiterated that shareholders do not own or control the bank, and cannot influence monetary policy.

Policy and regulatory decisions remain the preserve of the governor and deputy governors, he said.

The bank’s 15-person board focusses only on governance issues. Eight of the directors are appointed by the president, while the remaining seven are nominated by shareholders

Poor economic growth, but gains in reducing inflation volatility

Speaking more broadly about policy, Kganyago said the bank expects SA’s annual economic growth for 2019 to decline to just 0.6%, lower than the 0.8% recorded in 2018.

He was more upbeat about inflation expectations, noting that headline consumer price inflation averaged 4.6% over the past year, within the bank’s range of between 3% and 6%.

In recent years good progress has been made in reducing inflation volatility, he said, adding a “stable and predictable” path of inflation would enhance the environment for economic growth.