What is the South African Reserve Bank (SARB)?
The South African Reserve Bank (SARB) is the central bank of South Africa and controls monetary policy in the country. It was established in 1921 and its main functions are to ensure price stability; promote a sound financial system; maintain sufficient foreign exchange reserves, issue currency notes and coins, manage public debt, regulate banking activities and provide economic advice to government. The SARB also provides some important services such as managing payments between banks (clearing), providing electronic payment systems, monitoring money supply growth rates, issuing coins for circulation and acting as banker to the government.
The SARB is responsible for setting interest rates which are used by commercial banks to determine their lending rates on mortgages or other loans. It also has oversight over private sector credit providers such as micro lenders. In terms of macroeconomic management it can set reserve requirements that help control inflation by limiting excessive credit expansion in an economy.
In 2018 SARB launched a pilot project called Project Khokha which aimed at testing distributed ledger technology (DLT). This was done with the intention of improving interbank clearing processes while reducing cost associated with traditional transfers like SWIFT transfers or cheque processing costs. The success of this project suggests that blockchain technology could be utilized more extensively in future by SARB for various purposes including regulating cryptocurrencies if necessary.
