S.Africa cbank should target jobs: union federation

By Gordon Bell

JOHANNESBURG (Reuters) - South Africa's central bank should target employment when deciding on interest rates and worry less about inflation when the economy is struggling, a top official from trade union federation COSATU said on Thursday.

Chris Malikane, head of policy at the federation that is an ally of the ruling ANC, also said in an interview with the weekly Financial Mail magazine that the country should print money rather than take on debt.

The alliance of the ruling party, COSATU and Communist Party agreed earlier this month to review the mandate of the central bank, to broaden it from merely targeting inflation.

The powerful trade union group wants the rand currency to weaken, interest rates slashed and inflation targeting -- the bank is tasked with keeping consumer inflation at between 3 and 6 percent -- scrapped.

It says the policy has led to rates staying too high, hurting the poor and costing the economy jobs during its first recession in nearly two decades.

COSATU has gained more influence this year after helping Jacob Zuma rise to the head of the ANC and government, and has been pushing for the new president to shift away from a previously conservative, market-friendly stance. The comments give a clearer picture of COSATU thinking.

Malikane -- an economics professor at Johannesburg's Wits University -- said targeting only one variable limited the extent to which the central bank could manage the economy.

"The key variable to include is employment. And to target employment you need the to use the growth rate as an intermediate target."