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"The statements that nothing will change if the Reserve Bank is nationalised are not correct as it poses a very serious threat to the economy and the country because it is directly targeting the control and access to the country’s gold and other foreign reserves,” says Fanie Brink, an independent agricultural economist.

He referred to former president Thabo Mbeki and Reserve Governor Lesetja Kganyago who made these misleading statements last week.

According to the latest quarterly report of Reserve Bank's, the country's gross gold and other foreign reserves, mainly foreign currency, amounted to R736.6 trillion at the end of February this year.

The mandate was for many years prescribed by the Reserve Bank's own Act to “curb the inflation rate,” but it was later changed by the government in section 224(a) of the Constitution to "protecting the currency in the interest of stable and sustainable economic growth."

"The Reserve Bank is, therefore, not independent of the government and can only exercise its mandate independently."

The decision of the ANC's Nasrec conference in 2017 to nationalise the Reserve Bank has not yet been tabled in parliament, but it certainly holds in a far greater threat to the economy and the country than the statements pretending that nothing will change.

Some government officials also took the decision further after returning from the World Economic Forum's summit held in Davos, Switzerland in February, with the suggestion that the nationalisation of the Reserve Bank should be aimed at the creation of inclusive economic growth and employment opportunities, which was merely a banner under which the ANC was targeting the country's gold and other foreign reserves.

Brink says the claims that the Reserve Bank can keep the inflation rate in check and protect the exchange rate, as well as stimulate the economy through the application of its monetary policy by changing interest rates, cannot be further away from the truth as there is absolutely no evidence for these claims. Monetary policy is, in fact, the biggest delusion in economic science.

"The consequences of the looting and destroying of the country's reserves by the government to further enrich the ANC elite and to try and stay in power for longer will be the last straw to finally break the camel's back," Brink said.


29 April 2019
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