Another Reserve Bank shake-up on the cards for South Africa

 ·8 Apr 2024

The six-person Monetary Policy Committee (MPC) tasked with setting the country’s repo rate could grow to seven, after Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, signalled that it would be ideal to have an uneven number.

Kganyago said in an interview with News24 that the MPC “prefers an odd number (of members),” to prevent the possibility of a deadlock when committee members vote on interest rates.

In the event of a deadlock in voting, the governor breaks the tie.

The MPC meets six times a year to set the repo rate and can consist of up to seven members, including the governor of the SARB, three deputies, and senior officials appointed by the governor.

If a seventh member becomes a reality, this will be chosen by Kganyago and his team of three deputy governors from within the organisation.

The members of the MPC are currently made up of:

The current Monetary Policy Committee. Screenshot: SARB website

According to the Reserve Bank, a standard MPC meeting starts with presentations from numerous senior officials from the SARB about the latest developments in both the global and domestic economies, as well as in the financial markets, sharing projections for the economic future.

After these presentations, the SARB staff economists leave, allowing the MPC members to deliberate and decide on the approach to the repo rate. They then craft a statement detailing their decision.

There have already been two new appointments to the MPC in 2024, which started this year at four members. Kganyago has also accepted a third term as governor.

In January, adviser to the governors David Fowkes was appointed to the committee just ahead of the first interest rate decision of the year, with the committee consisting of an odd number of decision-makers at the time.

In March, Modise, who was previously the deputy director-general of public finance at Treasury, was appointed as deputy governor. As a result, she became the sixth member of the MPC effective from 1 April.

The position had been vacant since October 2023 after the resignation of Kuben Naidoo.

The next interest rate decision is expected just after the election, on 30 May.

Read: Big interest rate shift on the cards for South Africa

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