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Central banks, Financial institutions

SARB Fact Sheets

South African Reserve Bank Fact Sheets.

The South African Reserve Bank has recently updated its series of ten Fact Books:

No. 1 – Introduction to the South African Reserve Bank

Establishment of the Bank   The South African Reserve Bank (the Bank) is the central bank of the Republic of South Africa. The Bank was established in 1921 in terms of a special Act of Parliament, the Currency and Banking Act of 1920 (the Act), and was the direct result of the abnormal monetary and financial conditions that had arisen during and in the period immediately following World War I. At that time central banks existed mainly in the United Kingdom and Europe. It is the oldest central bank in Africa and in the southern hemisphere. … Download Fact Sheet No. 1

No. 2 – Why is inflation bad?

In the first fact sheet in this series on the South African Reserve Bank (the Bank) titled “Introduction to the South African Reserve Bank”, was pointed out that the Bank’s mission is to protect the value of the rand, that is to combat inflation. This task has been assigned to the Bank in terms of the Constitution and the South African Reserve Bank Act 1989 (Act No. 89 of 1989). What does this imply and what is inflation? Why is inflation bad? … Download Fact Sheet No. 2

No. 3 – How to fight inflation

Fact sheet No. 2 in this series indicates that inflation is a process of continual increase in the general price level, and that inflation is bad for the economy and for the general public. … Download Fact Sheet No. 3

No. 4 – Exchange rates and exchange control

What is an exchange rate? An exchange rate is the rate at which the currency of one country is exchanged for the currency of another country. For instance, if one goes to an authorised dealer in foreign exchange and purchases one United States dollar by paying R7,00 then the exchange rate of the rand against the dollar is R7,00 for one dollar. … Download Fact Sheet No. 4

No. 5 – Management of gold and foreign-exchange reserves

The South African Reserve Bank (the 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. This fact sheet focuses on one of the functions of the Bank, which is to manage South Africa’s official gold and foreign-exchange reserves prudently. However, it is necessary first to describe foreign exchange and an exchange rate briefly, then to consider why central banks hold reserves and what constitutes an appropriate level of such reserves, before discussing the management of these reserves. … Download Fact Sheet No. 5

No. 6 – Factors leading to the founding of the South African Reserve Bank

The South African Reserve Bank (the Bank) was founded in 1921. what follows are the reasons for the founding of the Bank. … Download Fact Sheet No. 6

No. 7 – National government debt

From time to time the government, like most other participants in the economy, must make use of credit to balance its books. The government’s borrowing power is, however, restricted by the Public Finance Management Act 1999, (Act No. 1 of 1999) (previously by the Exchequer Act 1975, (Act No. 66 of 1975). This Act allows national government to borrow money to: • finance the national budget deficit (i.e., the difference between revenue and expenditure of national government);• refinance maturing debt or a loan redeemed before the maturity date;• obtain foreign currency;• maintain credit balances on a bank account of the National Revenue Fund; and• regulate the domestic monetary situation should the necessity arise. … Download Fact Sheet No. 7

No. 8 – Interest rates and how they work

What are interest rates?   Interest rates are prices for loanable funds – prices of funds invested, lent out or borrowed for various periods. The supplier or lender of funds normally wants to earn an income and the user or borrower will generally be prepared to pay for the right to use the accumulated funds. … Download Fact Sheet No. 8

No. 9 – The South African Reserve Bank’s system of accommodation

The main reason for the operations of the South African Reserve Bank (the Bank) in the money market is to implement the Bank’s interest rate policy as determined by the Monetary Policy Committee (MPC), with the aim of achieving the Bank’s inflation target. In its monetary operations, the Bank endeavours to promote financial stability by managing the liquidity needs of the banking system as a whole. It also contributes to the development and efficiency of the domestic financial markets, in particular the interbank market. The Financial Markets Department uses various instruments to conduct the Bank’s monetary operations. … Download Fact Sheet No. 9

No. 10 – The Bank Supervision Department

The South African Reserve Bank (the Bank) is the central bank of South Africa, and has been mandated to achieve and maintain price stability in the interest of balanced and sustainable economic growth in South Africa. Price stability is underpinned by the stability of the financial system and financial markets. For this reason, the Bank actively promotes price stability in the interest of financial system stability. This fact sheet focuses on one of the core functions of the Bank, namely that of regulating and supervising banks in South Africa. … Download Fact Sheet No. 10wordpress counter

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About Coastal Roy

A consultant experienced in the financial sector in Africa and with a background of central banking, the financial system and information technology. Area of expertise: - Financial market development and regulation. - Payment, clearing and settlement systems modernisation and regulation. - Strategy and policy development for central banks and the financial sector. - Capacity building, advising and mentoring in financial sector development. Educational qualifications: - Master of Business Leadership, degree; UNISA - BSc (Hons) degree in Physics, Manchester University


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