Nene stopped nationalisation of Reserve Bank at last second: report
Newly-elected finance minister Nhlanhla Nene, used his political influence to force the ANC to drop a scheduled motion on the nationalisation of the South African Reserve Bank at the final hour.
According to a report by the Sunday Times, the motion which was set to be heard in parliament on Tuesday, was dropped as credit ratings agency Moody’s was in the country this past week.
Nene is said to have told the party’s political strategy committee on Tuesday morning that the debate must not go ahead because it might unsettle the markets at a time when Moody’s ratings agency was in the country, and lead to another downgrade.
“Nhlanhla told us the timing was not good because Moody’s is in the country,” said an MP who attended the meeting.
“He also advised that caucus should first conduct an assessment of the best international practices on the ownership of central banks so that the motion is better informed, to avoid sending a wrong message to the money market,” the MP added.
However the move is said to have embarrassed the ANC, reports the Sunday times, with its political opponents slamming the abrupt withdrawal of the motion.
The EFF said it would table its own motion on the nationalisation of the Reserve Bank as the ANC “was showing cowardice” on the matter.
Fitch and Standard & Poor’s have both downgraded South African sovereign debt to sub-investment (“junk”), with Moody’s opting to follow a wait-and-see approach before downgrading the country to junk status.
Following the election of Cyril Ramaphosa as president, and the recent uptick in optimism, analysts say they do not expect Moody’s to downgrade South Africa further.
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