Twin Peaks: The Role of the South African Central Bank in Promoting and Maintaining Financial Stability
Journal of Contemporary Roman-Dutch Law, Vol. 80, p. 636-656, 2017
21 Pages Posted: 22 May 2018
Date Written: November 9, 2017
Abstract
In terms of section 3 of the Reserve Bank Act the primary objective of the South African Reserve Bank (SARB) is the protection of the value of the currency of the Republic in the interest of balanced and sustainable economic growth in the Republic. Subsequently, the status of the SARB as central bank of South Africa was given recognition in section 223 of the Constitution when the latter was enacted. The Constitution also provides that the primary objective of the SARB is to protect the value of the currency in the interest of balanced and sustainable economic growth in the Republic. The Constitution further specifies that the powers and functions of the SARB are those customarily exercised and performed by central banks, which powers and functions must be determined by an Act of Parliament and must be exercised or performed subject to the conditions prescribed in terms of that Act. The autonomy of the SARB is entrenched in the Constitution which provides that the SARB must, in the pursuit of its primary objective, perform its functions independently and without fear, favour or prejudice but that there must nevertheless be regular consultation between the SARB and the Minister of Finance.
Keywords: South African Reserve Bank, primary objective of central bank, sustainable economic growth, protection of value of currency
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