An African National Congress (ANC) Parliamentary motion to debate the nationalisation of the South African Reserve Bank (SARB) has been withdrawn, to allow the party to consult further on the matter within its structures and with key stakeholders.
The debate was set to take place in Parliament on Tuesday afternoon.
At the ANC’s 54th national conference in December 2017, the party’s Economic Transformation Committee resolved that the SARB should be nationalized.
This would mean that the existing structure of private shareholders within the central bank would fall away.
The Reserve Bank raised concerns at the time that changing its ownership structure could raise financial and economic risks for South Africa, especially at that time when political tensions were running high.
In a short statement on Tuesday morning Nonceba Mhlauli, spokesperson for the office of the ANC's chief whip, said the motion, which was set to debate "full public ownership on the South African Reserve Bank (SARB) in line with international practice” would be withdrawn.
She said this would allow for "greater consultation within structures of the African National Congress and key stakeholders".
Speaking at the National Asset and Liability Management Conference in London last week, SARB Governor Lesetja Kganyago emphasised the importance of the bank’s independence in order to achieve price stability.
"The policies that are available to achieve or maintain financial stability often require cooperation between various regulatory authorities. A challenge for central banks is ensuring that monetary-policy independence is not undermined in the process. This is particularly the case in the event of conflicts between competing objectives," he said.
The Democratic Alliance (DA) welcomed the decision, especially as ratings agency Moody’s is in the country. Moody’s has South Africa on review for a downgrade and will announce the outcome later this month.
In November Moody’s said that there were concerns over pressures placed on “key policymaking institutions” such as the Reserve Bank and the National Treasury.
“Developments which cast further doubt over the independence and credibility of core institutions including the National Treasury and the Reserve Bank would be strongly credit negative,” Moody’s warned.
DA MP David Maynier said in a statement that the debate would have "panicked investors and made a sovereign credit rating downgrade to junk status more likely in South Africa".