About South African Reserve Bank
The Reserve Bank is the central bank of the Republic of South Africa. The Bank was established in 1921 in terms of a special Act of Parliament, the Currency and Banking Act, 1920 (Act No. 31 of 1920).
Prior to the Bank's establishment, commercial banks in South Africa issued banknotes to the public. There was however no uniformity in the legislation providing for the issuance of banknotes by commercial banks. The only requirement was that issuing banks were obliged to convert notes held by the public into gold when banknotes were tendered at their branches.
After the First World War (1914 - 1918), the price of gold in the United Kingdom rose above its price in South Africa and a profit could be made by converting banknotes into gold in South Africa and selling the gold in London. Commercial banks had to buy gold at a higher price in London (for re-import into South Africa to back their banknotes in issue) than the price at which they converted their banknotes into gold. This "obligation to trade at a loss" posed a serious threat to the ability of banks to continue meeting their obligations.
To protect their financial viability, the commercial banks requested the Government to release them from the obligation to convert their banknotes into gold on demand. This led to the Gold Conference of October 1919. Following the recommendations of the Conference, a Select Committee of Parliament recommended the establishment of a central bank to assume, among other responsibilities, responsibility for the issuing of banknotes and for taking over the gold held by commercial banks.
The South African Parliament accepted the recommendation of the Select Committee on the creation of a central bank and promulgated in December 1920 the Currency and Banking Act, which provided for the establishment of the Bank. Effect was given to its various provisions in the course of the next six months and the Reserve Bank opened its doors for business for the first time on 30 June 1921.
Previous Governors
Since 1921, the Bank has been served by eight Governors. Ms Gill Marcus, is the first woman to lead the Bank.
The Bank's previous Governors were:
Mr W H Clegg, 17 December 1920 to 31 December 1931
Dr J Postmus, 1 January 1932 to 30 June 1945
Dr M H de Kock, 1 July 1945 to 30 June 1962
Dr G Rissik, 1 July 1962 to 30 June 1967
Dr T W de Jongh, 1 July 1967 to 31 December 1980
Dr G P C de Kock, 1 January 1981 to 7 August 1989 (the only person who died while still serving as Governor)
Dr C L Stals, 8 August 1989 to 7 August 1999
Mr T T Mboweni, 8 August 1999 to 8 November 2009
Ms G Marcus, 9 November 2009 to 8 November 2014
Current Governor
Mr EL Kganyago, 9 November 2014
Functions
The primary function of the Reserve Bank is to protect the value of South Africa's currency.
In discharging this role, it takes responsibility for:
- Ensuring that the South African money, banking and financial system as a whole is sound, meets the requirements of the community and keeps abreast of international developments;
- Assisting the South African government, as well as other members of the economic community of southern Africa, with data relevant to the formulation and implementation of macroeconomic policy; and
- Informing the South African community and all stakeholders abroad about monetary policy and the South African economic situation.