South African Reserve Bank

What Is the South African Reserve Bank?

The South African Reserve Bank (SARB) is the central 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.

key takeaways

  • The South African Reserve Bank (SARB) is the central bank of South Africa.
  • Along with managing monetary policy, the South African Reserve Bank's main objective to control inflation.
  • The South African Reserve Bank is one of the few privately owned central banks in the world, but there has been recent talk of nationalizing it.

Understanding the South African Reserve Bank

The South African Reserve Bank was established with the Currency and Banking Act of 1920, a special piece of legislation by South Africa's parliament, and started operations in 1921. The uncertainty of economic conditions after World War I motivated its creation, reflecting the need for monetary regulation and government control by a single financial entity. It was one of the first central banks established outside of the developed Western world (the U.S., the U.K., and Europe). Prior to SARB's establishment, South Africa's currency was handled by commercial banks.

The South African Reserve Bank is governed by a board of 14 members, which include the bank's governor, three deputy governors, three directors who are appointed by South Africa's president, and seven members who represent the seven top industries in the country: agriculture, commerce, and finance.

Since its inception, the South African Reserve Bank has had 10 governors. The first governor of the Reserve Bank was William Henry Clegg, who served for 11 years. The current governor is Lesetja Kganyago, who has held the position since 2014.

The SARB is headquartered in Pretoria, South Africa. It employs approximately 2,000 staffers.

Objectives of the South African Reserve Bank

SARB states its key objective is to achieve and maintain price stability of the rand in the interest of balanced and sustainable economic growth within South Africa. More specifically, the bank aims to maintain the South African consumer price index to an inflation rate between 3% and 6% annually.

Other mandates include the restoration of financial stability if a systemic event occurs or is imminent; to integrate prudent regulation and supervision of financial institutions and markets, and to monitor the financial system overall.

R27.4 billion

Total reserves of the South African Reserve Bank

Financials of the South African Reserve Bank

In its 2018/2019 annual report, the latest available, the SARB stated that its net investment income increased by South African R5.8 billion while operating costs increased by R1.8 billion. The net report was an after-tax profit of R4.6 billion. 

Total assets were reported at R872,839,514, an increase of R131.0 billion.

Ownership of the South African Reserve Bank

Unlike the central banks of most nations, the South African Reserve Bank has always been privately owned. As of February 2020, it has around two million shares outstanding and over 783 shareholders. The majority are South Africans; just over 8% are foreigners—mainly Germans. The stockholders have no influence on the bank's monetary policy or the selection of its governor and deputies.

In 2018, a left-leaning member of the South African parliament—who belongs to the political party in opposition to the current government of President Cyril Ramaphosa—introduced a bill to nationalize the South African Reserve Bank. It lapsed for a year, then was reintroduced in November 2019. President Ramaphosa has said he agrees the bank should be government-owned but doesn’t support nationalization currently, given the costs to taxpayers and the economy.

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  1. "Introduction to the South African Reserve Bank." Accessed March 16, 2020.

  2. South African Reserve Bank "Group Annual Financial Statements 2018/2019." Accessed Mar. 17, 2020.

  3. Mail & Guardian. "Who owns the Reserve Bank?" Accessed Mar. 17, 2020.