In addition to this, the SARB has a statutory mandate to enhance and protect financial stability in South Africa.

The SARB is also responsible for:

• issuing and destroying banknotes and coin;
• regulating and supervising financial institutions;
• managing the official gold and foreign reserves of the country;
• managing the national payments system;
  
• administering the country’s remaining exchange rate control systems;
• acting as the banker to government; and
  
• acting as lender of last resort to provide liquidity assistance in exceptional cases.

Mandate

Section 224 of the Constitution of South Africa states the mandate of the SARB as follows:

1. 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.
2. The South African Reserve Bank, in pursuit of its primary object, must perform its functions independently and without fear, favour or prejudice, but there must be regular consultation between the Bank and the Cabinet member responsible for national financial matters.

Price stability implies maintaining inflation within the target range of 3-6%, as set by government. The achievement of this target is underpinned by the stability of the financial system and financial markets. For this reason, the Bank is obliged to actively promote financial stability as one of the important determinants of financial system stability.

Policy independence

The independence and autonomy of the Bank are entrenched in the Constitution. The SARB has the independence to use any of the monetary policy instruments at its disposal to achieve its monetary policy goal. However, the selection of a monetary policy goal is the responsibility of government.

The Governor of the Bank holds regular discussions with the Minister of Finance and meets periodically with members of the Parliamentary Portfolio and Select Committees on Finance. In terms of section 32 of the South African Reserve Bank Act, Act No. 90 of 1989, the Bank publishes a monthly statement of its assets and liabilities and submits its annual report to Parliament. The Bank is therefore ultimately accountable to Parliament.

Strategy

The SARB’s strategy centres on fulfilling its price and financial stability mandates to meaningfully contribute towards the economic well-being of all South Africans. The strategy is articulated through five strategic focus areas (SFAs). Each of the SFAs is supported by strategic objectives that prioritise key areas of work. Progress against each focus area is reported on in the annual report.