South African Reserve Bank
The South African Reserve Bank is the countrys central bank and acts as banker to the government and the private banking sector. The Bank was established in 1921 and its principle function is to implement monetary policy and regulate the banking sector on behalf of the government. It is located in the financial hub of Pretoria.
The Banks mission is to contribute towards a sound financial system that ensures price stability and promotes balanced and sustainable economic growth in the public interest. This is done by providing policy advice and making sure that the monetary policy is executed efficiently, issuing legal tender currency, maintaining the value of the currency and regulating the financial system. This includes promoting the safety, soundness and efficiency of the financial system.
The Banks primary function is to ensure the soundness of the banking system and its liquidity by setting Reserve Ratios and Supervisory Standards, as well as ensuring compliance with these standards. It also acts as a lender of last resort in cases of financial distress.
The Bank is also responsible for issuing the national currency (the Rand), as well as controlling its supply and circulation. This includes managing foreign exchange reserves, buying and selling foreign currency on the open market and setting official rates of exchange.
The Bank is also responsible for managing and investing the nations foreign exchange reserves. This includes managing reserves for external debt servicing and objectives that support the countrys balance of payments.
The Bank also produces economic research, statistics and surveys. This assists policymakers in making sound decisions. It also serves as a conduit for interaction between the public and private sectors of the economy.
The Bank is also responsible for regulating the banking sector in South Africa. This includes setting standards and supervising the largest banks in the country, as well as ensuring that commercial banks comply with the central bank’s reserve requirements.
The Bank also assists in the resolution of financial disputes and promotes financial stability in South Africa. It does this through financial sanctions and the Banks facilities for government debt management.
As a central bank, the Banks ultimate goal is to ensure price stability by acting as the guardian of the nations economy. It does this through stable prices, full employment and balanced economic growth. The Bank also promotes individual financial wellbeing and contributes to making the economy globally competitive.
Finally, the Bank is responsible for developing and promoting the countrys financial system, including the payment and settlement systems, securities markets and all aspects of the banking system. To achieve this, the Bank has developed a number of payment and settlement systems and electronic funds transfer systems.
Overall, the South African Reserve Bank is an influential institution in the functioning of the South African economy. Its role in monetary policy, regulation, currency and foreign exchange is essential to the countrys stability.
