Issued by: Office of the Executive Deputy President
Recent attacks were made on the Reserve Bank and on the Governor of the Bank that stimulated an unhealthy speculation in the media on the position of the Reserve Bank, and on the future course of monetary policy in South Africa.
Government wants to make it clear that it respects the autonomy of the Reserve Bank with regard to the implementation of monetary policy in South Africa. Government is also satisfied with the continuing good co-operation that exists between itself, including the Ministry of Finance, on one hand and the Reserve Bank on the other. Government therefore has no intention of changing the status quo as defined in terms of Articles 223 to 225 of the Constitution of the Republic of South Africa.
In the attacks on the Reserve Bank, certain allegations were made about the legality of lender of last resort assistance made available by the Bank to banking institutions in the past. Charges were also made that the Bank squandered tax payers' money in the process, and that the Government now has a right to claim certain refunds from the shareholders of specified banking institutions. These allegations were denied by the Bank.
Both the Government and the Governor are interested that these allegations, none of which originated from the Government, are investigated expeditiously. Among others, this may help to clarify the role and functions of the Bank as lender of last resort.
Neither the Government nor the Governor of the Reserve Bank regard it to be in the interest of South Africa to allow a continuous debate in the media about these untested accusations. It was therefore decided to refer the matter to the Special Investigating Unit, chaired by the Honourable Judge W.H. Heath, for investigation and report back to Government. The Governor fully supports this decision. Judge Heath will be requested to expedite this investigation and to report to Government as a matter of urgency within the next few weeks.
Speculation is also growing on the appointment of a successor to Dr Stals when he reaches the end of his present term of Office as Governor of the Reserve Bank on 7 August 1999. No decisions have as yet been taken in this regard. The Government and the Reserve Bank will, however, work together to ensure that any changes that may have to be introduced in the top management of the Bank at that time will not disrupt the course of monetary policy
Issued by: Ricky Naidoo Office of the Deputy President Date: 21 May 1998 Tel: 083 555 5189