South African Reserve Bank (SARB) has warned in a statement that nationalizing it could put South Africa at economic risk.
The statement, released on Thursday evening, followed the resolution of the 54th African National Congress (ANC) this week that the Central Bank should be nationalized.
ANC said the government must begin nationalizing the Reserve Bank and the government should own 100-percent shares in the SARB.
“The South African Reserve Bank is of the view that the process of changing the ownership structure of the SARB at this point in time could raise the level of risk and uncertainty for the country in both a financial and economic policy sense. This heightened exposure to risk is unwarranted given the country’s fragile economic situation,” said the bank.
In the current setup, a shareholder and his or her associates can not hold more than 10,000 shares out of the total of 2 million shares in issue.
The bank said nationalizing it would also be expensive as its shares currently trade for much less than the price at which some existing shareholders are willing to sell their shares. They stated that buying out existing shareholders will result in paying large sums of money to effect cosmetic changes. Enditem