February 20, 2012 / 6:18 PM / in 6 years

Madagascar cbank staff extend sit-in after governor's removal

Feb 20 (Reuters) - Staff at Madagascar’s central bank staged a sit-in for a second day on Monday, vowing to paralyse the bank’s operations, after the transitional government replaced the governor without notice, a move the protestors say contravened the bank’s independence.

About 100 of 580 central bank employees joined the protest, which began on Friday when the government replaced Frederic Rasamoely, governor since January 2007, with a senior bank official, Guy Ratovondrahona, without notifying the bank’s board. Ratovondrahona was named acting governor.

The central bank is responsible for monetary policy and bank regulation on the Indian Ocean island.

Finance Minister Hery Rajaonarimampianina said on Monday that the government had the power to make the change, saying Rasamoely’s mandate, and the central bank board’s mandate, had both expired a year ago. Rasamoely had only been re-appointed for two six-month terms, Rajaonarimampianina said.

“The repeal of the appointment of the governor was January 2011 on the basis of the end of his term. He has been acting for six months, renewable once,” Rajaonarimampianina told a press conference.

Angry employees, sitting in the courtyard of the central bank, vowed to continue their sit-in on Tuesday and said they would bring the bank’s operations to a halt.

“We continue our strike tomorrow, we are challenging the appointment of the new governor,” Aina Razafindrakoto, a spokesman for the strikers, told Reuters.

The government came to power after launching a coup in 2009 but was only officially recognised as a transitional government last September.

Madagascar, one of the world’s poorest countries but its biggest producer of vanilla, has been beset by political uncertainty since the coup ousted President Marc Ravalomanana, prompting many countries to freeze non-emergency aid to the island.

The country has since struggled to regain the confidence of foreign investors, who had been eyeing its deposits of oil, gold, chrome and uranium. (Writing by James Macharia; Editing by Susan Fenton)

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