Question

The South African Reserve Bank is the central bank of the Republic of South Africa. The primary purpose of the Bank is to achieve and maintain price stability in the interest of balanced and sustainable economic growth in South Africa. Together with other institutions, it also plays a pivotal role in ensuring financial stability. Identify and explain the FOUR (4) key functions performed by South African Reserve Bank in pursuit of its mandate and purpose.

Answer 1

Answer - The central bank of south africa has the following main functions -

1 - It has the resonsibility of printing the currency notes for the economy to carry on the transactions in the economy.

2 - It has to implement the various monetart policies which can be expansionary or contractionary in nature. These policies will make sure that the economy maintained the stable level of inflation in economy.

3- The central bank has to function as the regulator of the commercial banks of the country. It has to decide the reserve ratio and other policies for the smooth functioning of the banking system as the money creation process depends on these banks

4 - It has also to keep ace with the policies and targets of the government and act as the banker to the government whenever it is in need