'Notes, coins are worth nothing. They only carry value because of our standing'
Lesetja Kganyago – raised in a village in Limpopo - was born in Alexandra township near Sandton.
It was the height of apartheid and his pregnant mother went to Johannesburg to give birth so he could one day work there under pass laws.
Kganyago earned a BCom degree from Unisa and a master’s degree in Development Economics from the University of London.
He started his career at FNB and worked for Cosatu and the ANC before joining the South African Reserve Bank (Sarb) in 1994 for a two-year stint before starting work at Treasury.
He became Sarb Deputy Governor in 2011 and Governor in 2014.
Kganyago is the world’s best central banker, according to authoritative publication Central Banking.
Kieno Kammies interviewed Kganyago.
The Governor spoke a bit about himself and about central banking in general.
They also spoke about the Sarb’s measures to cushion the pulverising blow of the Covid-19 lockdown.
In your wallet… those notes and coins are worth nothing – the only reason you carry it is because they carry the standing of the Reserve Bank… It’s our duty to protect the value of those notes and coins…Lesetja Kganyago, Governor - South African Reserve Bank
The plumbing behind the movement of money is the Reserve Bank’s national payment system…Lesetja Kganyago, Governor - South African Reserve Bank
The Reserve Bank is run by technocrats… They must make decisions about the protection of the value of money. The rationale behind making them independent is to take them away from a political cycle. The history of economics is full of horror stories of how politicians making short-term decisions… These people don’t have to worry about the next election… they don’t have to make popular decisions…Lesetja Kganyago, Governor - South African Reserve Bank
It is not about the paper it’s printed on. It’s about who is standing behind it… We regulate the banks… and make sure that financial markets function…Lesetja Kganyago, Governor - South African Reserve Bank
We make lending and borrowing decisions… We don’t make decisions about spending… If you conflate spending decisions with lending and borrowing decisions, you have a dangerous concoction. You end up with money being printed that is unjustified by economic activity… ending up in tears.Lesetja Kganyago, Governor - South African Reserve Bank
That the current Finance Minister understands central banking so well, means I have less explaining to do…Lesetja Kganyago, Governor - South African Reserve Bank
Listen to the interview in the audio below.
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