Kganyago sees Mboweni guarding Sarb’s independence

South Africa’s new finance minister, Tito Mboweni, has vast experience in managing the economy after being involved in crafting the country’s macroeconomic framework, Reserve Bank Governor Lesetja Kganyago said.

Mboweni, a former central bank head, also helped set up inflation targeting in South Africa and should help to defend the regulator’s independence, Kganyago said in an interview on Bloomberg TV on Wednesday. Mboweni was the head of the Reserve Bank for a decade until 2009.

“He is an advocate of central bank independence and I would expect for him to defend and protect the independence of the South African Reserve Bank,” he said.

South Africa’s ruling African National Congress decided in December that the Reserve Bank should be state owned rather than by private shareholders. Kganyago has warned that this should not be used as a “trojan horse” to erode the institution’s independence.

President Cyril Ramaphosa appointed Mboweni to his cabinet on Tuesday after Nhlanhla Nene was dropped following an admission to a judicial inquiry that he had held meetings with a family implicated to looting state funds at their home, contradicting earlier statements.

Kganyago reiterated that the Reserve Bank will look through the impact of rand weakness and rather react to wider effects of the currency’s movements on inflation.

The rand gained almost 2% against the dollar on Tuesday, but remains 15% weaker for the year.