South African Reserve Bank (SARB)

Definition

The South African Reserve Bank (SARB) is the central bank of South Africa, and is implementing monetary policy, maintaining price stability, and promoting sustainable economic growth and financial stability. 

What is the South African Reserve Bank?

The SARB is responsible for formulating and implementing monetary policy to achieve its primary objective of price stability. It sets the benchmark interest rate, which influences borrowing and lending rates in the economy. Through its monetary policy decisions, the SARB aims to control inflation within its target range and support sustainable economic growth.

As the issuer of South Africa’s national currency, the South African rand (ZAR), the SARB is responsible for issuing and regulating banknotes and coins in circulation. It manages the currency supply to maintain confidence in the rand, ensure enough liquidity in the financial system, and facilitate efficient payments and transactions.

The SARB oversees the banking sector and financial institutions operating in South Africa to ensure their safety, soundness, and compliance with regulatory requirements. It supervises banks, insurance companies, and other financial organisations to promote financial stability, protect depositors’ funds, and reduce systemic risks. 

Furthermore, the SARB monitors and assesses risks to financial stability, including systemic risks, market disruptions, and vulnerabilities in the financial system. It collaborates with other regulatory authorities, such as the Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA), to coordinate overall supervision and crisis management efforts. 

Lastly, the SARB engages in international cooperation and collaboration with other central banks, monetary authorities, and international financial institutions to promote monetary policy coordination, exchange rate stability, and global financial stability.