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The South African Reserve Bank is the central bank of the Republic of South Africa. It regards its primary goal in the South African economic system as the achievement and maintenance of price stability.

The South African Reserve Bank is convinced that it is essential that South Africa has a growing economy based on the principles of a market system, private and social initiative, effective competition and social fairness. It recognises, in the performance of its duties, the need to pursue balanced economic development and growth.

The South African Reserve Bank conducts monetary policy within an inflation targeting framework. The current target is for CPI inflation to be within the target range of 3 to 6 per cent on a continuous basis. The Bank has a floating exchange rate policy and there are no exchange rate targets.

Financial stability

Financial stability can be described as the absence of the macroeconomic costs of disturbances in the system of financial exchange between households, businesses and financial-service firms. Stability would be evidenced by, firstly, an effective regulatory infrastructure, secondly, effective financial markets and thirdly, effective and sound financial institutions.

Statistical & economic info

The Reserve Bank collects, processes, interprets and publishes economic statistics and other information. To this end, the Bank publishes, inter alia, Quarterly Bulletins and Annual Economic Reports. The data these publications contain are a major source of information for policy-makers, analysts and researchers.

Financial markets

The main objectives of the Financial Markets Department are to: perform international banking and international treasury services; implement the Reserve Bank’s interest rate policy; act as funding agent of the government; facilitate the effective functioning of the domestic financial markets; and manage the Reserve Bank’s gold and foreign exchange reserves.

Payment & settlement systems

The National Payment System is one of the pillars of financial stability. The Reserve Bank oversees the safety and soundness of the national payment system and implements risk-reduction measures in the payment system to reduce systemic risk. The Reserve Bank provides an inter-bank settlement service via the real-time electronic settlement system, the South African Multiple Option Settlement (SAMOS) system. Besides single settlements between banks, SAMOS is also used for the settlement of obligations arising out of retail payment clearing and the Equity and Bond markets.

Bank supervision

The Reserve Bank is responsible for bank regulation and supervision in South Africa. The purpose is to achieve a sound, efficient banking system in the interest of the depositors of banks and the economy as a whole. This function is performed by issuing banking licences to banking institutions, and monitoring their activities in terms of either the Banks Act, 1990 (Act No. 94 of 1990), or the Mutual Banks Act, 1993 (Act No. 124 of 1993).

Banknotes & coin

The Reserve Bank has the sole right to make, issue and destroy banknotes and coin in South Africa. The SA Mint Company, a subsidiary of the Bank, mints all the coins on behalf of the Reserve Bank. The SA Bank Note Company, another subsidiary of the Bank, prints all banknotes on behalf of the Bank.

Exchange controls

The Minister of Finance has delegated to the Governor and/or a deputy governor as well as to the General Manager of the Exchange Control Department (and to other officials in the department), all the powers, functions and duties assigned to and imposed on the Treasury under the Exchange Control Regulations (with certain exceptions). The Exchange Control Department is, therefore, responsible for the day-to-day administration of financial surveillance. The Minister of Finance has also appointed certain banks to act as Authorised Dealers in foreign exchange. This appointment gives these banks the right to buy and sell foreign exchange, subject to conditions and within limits prescribed by the Exchange Control Department. Authorised Dealers are not agents for the Exchange Control Department but act on behalf of their customers. Policy is determined by the Minister of Finance (or even government/cabinet in the broader sense). The South African Reserve Bank, therefore, merely acts as an adviser to the Minister of Finance.

Co-operative Bank Supervision

The introduction of the Co-operative Banks Act, Act No 40 of 2007 (the Act), seeks to create a development strategy and a regulatory environment for deposit-taking financial services co-operatives. The supervisor within the South African Reserve Bank has the authority to exercise the powers and perform the functions conferred on the supervisor by or in terms of the Act in respect of primary co-operative banks that hold deposits in excess of 20 million Rand, secondary co-operative banks and tertiary co-operative banks.

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