The Art Of Keeping Central Banking Above Politics

One of the South African Reserve Bank's new deputy governors is practised in the art of economic diplomacy. That could come in handy, given the dark clouds hanging over the local economy.

- Justin Brown

Politics does not exist in central banking, because we have obligations,” says new deputy governor of the South African Reserve Bank (Sarb) Nomfundo Tshazibana. She is sitting down with finweek at the Sarb’s headquarters in Pretoria, and is busy discussing one of her favourite central bankers at the moment, US Federal Reserve chairman Jerome Powell.

Tshazibana looks up to Powell and Bank of England’s Mark Carney because of their ability to communicate with investors and the public.

“[Powell] has done an amazing job in communicating what the Fed is doing… I have enjoyed the way he has interacted with American investors and the press. He sets a great example for all of us around central bank communication,” says Tshazibana. Powell has been under attack from US President Donald Trump, especially on the topic of interest rates, but Tshazibana says Powell “was doing his job”.

Moving across the pond, she believes that “when one looks at the activist role that central bank governors have had to play in several issues, [Carney] has done a sterling job in terms of getting the UK ready for the possible Brexit.

“If you talk to investors or anyone who has any form of interaction with the UK, they are not worried about the central banking elements. His messaging has always been clear about what works for that central bank.”