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Monday, 08 April 2024 13:13

SARB governor Kganyago wants to grow the MPC members to seven.

By Lehlohonolo Lehana.

Governor of the South African Reserve Bank (SARB), Lesetja Kganyago has signalled his desire for an additional member in the Monetary Policy Committee (MPC). 

Kganyago said in an interview with News24 that the MPC "prefers an odd number (of members)," to prevent the possibility of a deadlock when committee members vote on interest rates.

In the event of a deadlock in voting, the governor breaks the tie.

The MPC meets six times a year to set the repo rate and can consist of up to seven members, including the governor of the SARB, three deputies, and senior officials appointed by the governor.

The seventh member will be chosen by Kganyago and his team of three deputy governors from within the organisation.

There have already been two new appointments to the MPC in 2024, which started this year at four members. Kganyago has also accepted a third term as governor.

Kganyago's term was extended to 2029, which will make him one of the longest serving governors in democratic South Africa. He was first appointed in 2014.

In March, Mampho Modise, who was previously the deputy director-general of public finance at Treasury, was appointed as deputy governor. As a result, she became the sixth member of the MPC effective from 1 April.

The position had been vacant since October 2023 after the resignation of Kuben Naidoo.

The next interest rate decision is expected just after the election, on 30 May.

The consensus expectation of economists polled by Bloomberg is for the South African Reserve Bank to cut rates by a cumulative 1.25%, possibly starting as soon as the current economic quarter.