{"id":193777,"date":"2021-07-01T10:33:18","date_gmt":"2021-07-01T08:33:18","guid":{"rendered":"https:\/\/www.myza.co.za\/mboweni-hails-sarb-in-centenary-celebrations\/"},"modified":"2021-07-01T10:33:18","modified_gmt":"2021-07-01T08:33:18","slug":"mboweni-hails-sarb-in-centenary-celebrations","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/mboweni-hails-sarb-in-centenary-celebrations\/","title":{"rendered":"Mboweni hails SARB in centenary celebrations"},"content":{"rendered":"
<\/div>\n

While the country\u2019s financial stability may be the mandate of the South African Reserve Bank (SARB), it is the collective responsibility of several authorities to support the maintenance of financial stability.<\/p>\n

This was the assertion of Finance Minister Tito Mboweni on Tuesday during the central bank\u2019s centenary celebration.<\/p>\n

\u201cAt the National Treasury, our support comes in the way of developing a legal structure within which the regulatory authorities and the Reserve Bank can execute their mandate,\u201d said the Minister.<\/p>\n

During his address, he reflected on his time as the country\u2019s eighth governor between 1999 and 2009.<\/p>\n

\u201cIt was in many ways a momentous occasion. Africa was indeed on a path of transformation and on a new path in South Africa where we would integrate the old and the new and still move forward as one country.\u201d<\/p>\n

Pondering on his tenure, he said the bank\u2019s task at the time was to repair the South African economy, gain investor confidence and enhance the functions and policy decisions of the SARB.<\/p>\n

\u201cAs the work of the South African Reserve Bank is much easier with public support, it was necessary to improve the general public understanding of the role and functions of the central bank.<\/p>\n

During this period, Mboweni said the importance of containing inflation took centre stage in the strategy to improve communication.<\/p>\n

\u201cIt was necessary to convey the message that inflation is not a policy tool, but an aberration that has a negative impact on the country, with a particularly heavy burden on the poor.<\/p>\n

\u201cImportant changes in respect of media engagement and communication in general to achieve the goal of a better-informed public.\u201d<\/p>\n

Monetary Policy Committee <\/strong><\/p>\n

During this period, the bank has achieved several milestones. Among these was the establishment of the Monetary Policy Committee (MPC), with responsibility for setting monetary policy. This gave certainty about the decision-making structure and the cycle of monetary policy decisions.<\/p>\n

He said while some analysts link the establishment of the MPC with the adoption of an inflation target, these were two separate processes.<\/p>\n

\u201cAn MPC is not a precondition for inflation targeting, while inflation targeting is also not a precondition for an MPC,\u201d he said.<\/p>\n

During this period, Mboweni said a further important step was the introduction of a media briefing after each MPC. He said this enhanced public dissemination of information and made a further contribution to improved communication.<\/p>\n

Since then, the bank has used the signalling system for policy rate setting, with banks submitting tenders for liquidity to the central bank.<\/p>\n

He said: \u201cMuch has been written on the advantages and shortcomings of the signalling and tendering system and its comparison with a system of interest rate fixing. The signalling system was replaced by a system of repurchase (repo) rate setting by the South African Reserve Bank, perhaps in a somewhat roundabout way\u201d.<\/p>\n

Y2K period<\/strong><\/p>\n

Over the years, the central bank had to lead the country\u2019s banking system and the national payment system through the uncertain period in the run-up to the millennium change-over (Y2K) period.<\/p>\n

He said proper nation-wide preparation ensured that South Africa sailed through this period without any hick-ups.<\/p>\n

\u201cAfter the Y2K changeover it was obvious that a fixed repo system delivers better results than the signalling and tendering system.<\/p>\n

Inflation targeting<\/strong><\/p>\n

\u201cInflation targeting was adopted shortly after the millennium change-over. The inflation target serves as a clear anchor for monetary policy, thus focusing attention on the ultimate objective of the SARB. With a clear policy focus, the general understanding of the monetary policy framework improved, thus linking the understanding of interest rate adjustments and the focus on the rate of inflation.\u201d<\/p>\n

The introduction of inflation targeting as a monetary policy framework replaced the previous eclectic policy framework. The goal of exchange rate stability was one of the elements of the eclectic policy framework, he said.<\/p>\n

He expressed pride at how SARB\u2019s international standing improved during this period, saying international institutions and agencies enhanced their engagement with the Central Bank.<\/p>\n

Mboweni thanked the incumbent governor, Lesetja Kganyago, and his \u201cexceptional\u201d team for steering the ship with such \u201cexcellence and proficiency\u201d.<\/p>\n

South Africa, he said, was not spared by the 2008 global recession. The financial meltdown saw the country lose about million jobs.<\/p>\n

\u201cIn February 2011, driven by our experiences from the global financial crisis, as well as lessons learnt domestically, government signalled the process of implementing significant and far-reaching changes to the country\u2019s financial regulatory structure,\u201d said the Minister.<\/p>\n

In this respect, Cabinet approved the publication of a policy paper entitled \u201cA Safer financial sector to serve South Africa better\u201d<\/em>. The policy paper proposed the establishment of two dedicated regulators (the Prudential Authority and the Financial Sector Conduct Authority) (the Twin Peaks) to ensure a more intensive, intrusive and effective regulation of prudential and market conduct aspects of the financial sector.<\/p>\n

The Twin Peaks process culminated in the enactment of the Financial Sector Regulation Act of 2017. \u2013 SAnews.gov.za<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

While the country\u2019s financial stability may be the mandate of the South African Reserve Bank (SARB), it is the collective responsibility of several authorities to support the maintenance of financial stability. This was the assertion of Finance Minister Tito Mboweni on Tuesday during the central bank\u2019s centenary celebration. \u201cAt the National Treasury, our support comes […]<\/p>\n","protected":false},"author":1,"featured_media":193778,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[38678],"class_list":{"0":"post-193777","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-south-africa","8":"tag-sanews","9":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2021\/07\/mboweni-hails-sarb-in-centenary-celebrations.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/193777","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=193777"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/193777\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media\/193778"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=193777"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=193777"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=193777"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}