DEFINITION of South African Reserve Bank
The South African Reserve Bank (SARB) is the reserve bank of the Republic of South Africa. Its functions include the formulating and implementing of South Africa's monetary policy, ensuring the efficiency of South Africa's financial system and educating South Africa's citizens about the monetary and economic situation of the country. The SARB is also responsible for issuing both banknotes and coins.
The SARB was just the fourth central bank established outside the U.K. and Europe. It is located in Pretoria, South Africa.
BREAKING DOWN South African Reserve Bank
The South African Reserve Bank was established in 1921 by South Africa's parliament with the Currency and Banking Act of 1921. It was established after World War I when economic conditions became uncertain that brought about the need for regulation and government control.
Prior to the establishment of the reserve bank, South Africa's currency was handled by commercial banks. The South African Reserve Bank is governed by a board of fourteen members which include the governor, three deputy governors, three directors who are appointed by the president and seven members who represent the seven top industries in the country including agriculture, commerce, and finance.
The first governor of the Reserve Bank was William Henry Clegg who served for eleven years. The current governor is Lesetja Kganyago who has held the position since 2014. There have been ten governors since the inception of the bank.
Unlike the reserve banks of most nations, the South African Reserve Bank has always been privately owned.