June 23, 2017 / 6:44 AM / a month ago

South African parliament opposes calls to change central bank mandate

2 Min Read

JOHANNESBURG, June 23 (Reuters) - The South African parliament will launch a court challenge against an anti-graft watchdog's recommendation of constitutional changes to alter the mandate of the central bank, it said.

The legislative assembly joined the central bank and lender Barclays Africa in seeking a court review of Public Protector Busi Mkhwebane's proposal to change the central bank's primary mandate of maintaining currency and price stability to focus on economic growth.

"Parliament believes that the remedial action (mandate change), which is binding in terms of the law, usurps the powers of the institution under the Constitution," it said in a statement posted on its website.

"Parliament will accordingly initiate a court application to have this remedial action set aside on the basis of its unconstitutionality."

Mkhwebane made her proposal to a Pretoria news conference on Monday where she delivered her findings on an apartheid-era bailout of Barclays Africa Group. The lender has denied any wrongdoing.

Her call threatens to further stain South Africa's image as an investor-friendly emerging market, coming less than a week after mines minister Mosebenzi spooked investors by raising the minimum threshold for black ownership of mining companies to 30 percent from 26 percent.

The independence row over the South African Reserve Bank has also highlighted divisions within the tripartite alliance of the ruling African National Congress, the country's biggest union, Cosatu, and the South African Communist Party.

Both the ANC and the communist party are opposed to constitutional changes aimed at altering the role of the central bank while Cosatu backed calls for amendments. (Reporting by Tiisetso Motsoeneng)

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