South African central bank says unrealistic to target specific employment level

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JOHANNESBURG (Reuters) – South Africa’s central bank governor, Lesetja Kganyago, said on Wednesday that it is unrealistic for central banks to target specific employment levels, after the country’s governing party said the bank should broaden its focus.

The African National Congress (ANC), which is trying to woo voters before a May election, in January said that the South African Reserve Bank (SARB) should try to boost employment and economic growth alongside its goal for price stability.

The battle against unemployment has been a cornerstone of the presidency of ANC leader Cyril Ramaphosa since he became South Africa’s president in February last year.

“Employment levels are determined by many different things, so putting a specific target on it for the central bank to try to achieve is unrealistic,” Kganyago said during a lecture at Stellenbosch University.

Kganyago added that the case for the SARB’s existing inflation-targeting framework was “very strong”, according to a copy of the lecture distributed by the central bank.

Writing by Alexander Winning; Editing by David Goodman

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