S. African Assets Take Hit As Finance Minister Revisits SARB Mandate Debate

South Africa's Finance Minister Enoch Godongwana says that employment should be made "explicit" in the central bank's mandate, adding that he supports the central bank's independence and inflation-targeting. He emphasised that job creation is already "implicit" in the SARB's mandate.

• The debate about potentially changing the SARB's monetary policy remit came to the fore after the second leg of the ANC's elective conference, with delegates recommending broadening the central bank's mandate to include the labour market.
• These policy proposals have applied pressure to South African assets amid concerns about central bank autonomy. The broadening of the SARB's mandate could also tilt the central bank's monetary policy stance to the dovish side.
• President Ramaphosa sought to downplay investor concerns earlier this week, as he clarified that no change to the SARB's mandate is imminent. Tweaking the central bank's constitutional remit would require a two-thirds supermajority in parliament.
• Godongwana's comments this morning resulted in a renewed sell-off in South African assets, with USD/ZAR briefly erasing its earlier losses and local-currency bonds trimming gains.