The South African Reserve Bank (SARB) and the National Treasury (the Ministry of Finance) together constitute the monetary authority in South Africa.South Africa’s central bank was established in 1921 in terms of a special Act of Parliament.
The primary object of the South African Reserve Bank is to protect the value of the currency in the interest of balanced and sustainable economic growth in the Republic.The SARB acts as the central bank for the country and its banking institutions, is co- responsible for formulating South Africa’s monetary policy, and is largely responsible for implementing this policy.The Reserve Bank has a significant degree of autonomy in terms of South Africa’s Constitution and performs its functions independently, although it holds regular consultations with the minister of finance.The SARB sees it as 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 the need to pursue balanced economic policies that enhance both development and growth.The Bank is managed by a board of 14 directors representing commerce, finance, industry and agriculture. Seven directors are elected by the Bank’s shareholders. The President of South Africa appoints the governor, three deputy governors and three other directors to the board.The SARB’s management, powers and functions are governed by the South African Reserve Bank Act of 1989.
The Reserve Bank implements South Africa’s monetary policy and regulates the supply (availability) of money by influencing its cost.Monetary policy is set by the Reserve Bank’s monetary policy committee, which works within a flexible inflation-targeting framework.The Bank undertakes national and international transactions on behalf of the state, and acts for the government in transactions with the International Monetary Fund.The Bank is the custodian of the greater part of South Africa’s gold and other foreign exchange reserves.
The Reserve Bank controls the South African Mint Company, and issues banknotes printed by the South African Bank Note Company, a wholly owned subsidiary of the Bank.