The independence of the South African Reserve Bank (Sarb) has been a hot topic amid ongoing calls for its mandate to be changed.
The EFF has proposed the nationalising of Sarb and the ANC has called for its mandate to be altered to make provision for employment and economic growth.
Sarb has been privately owned since it was established in 1921.
The shareholders, however, do not have any control over monetary policy, financial stability policy or banking regulation.
So what exactly is the current mandate of the central bank?
Dr Stephen Labson, an international expert on regulation and finance, says central banks have control of the countries reserves and currency.
He says some of the roles of the Reserve Bank include:
- the power to determine interest rates
- oversight role on foreign exchange rates
- oversight role for commercial banks
- banker to commercial banks and National Treasury
Sarb's responsibilities include inflation targeting and regulating the repo rate - the is the rate at which the central bank lends money to commercial banks.
Without the Reserve Bank there's a greater danger of hyperinflation, instability, risk factors and [economic] uncertainty.— Dr Stephen Labson, Director of Trans African Energy and lecturer at the University of Johannesburg
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Dr Stephen Labson explains that substantially impacting employment and economic growth is not something the Reserve Bank is capable of.
He says its current mandate is sufficient and explain how Sarb impact on the country's economy.
There's a very strong consensus among economist that reserve banks cannot play a substantial role in terms of enabling employment growth in the long-term.— Dr Stephen Labson, Director of Trans African Energy and lecturer at the University of Johannesburg
There is not a direct relationship between inflation and growth in the long-term.— Dr Stephen Labson, Director of Trans African Energy and lecturer at the University of Johannesburg
The mandate that Sarb has is simple, powerful and strong in terms of keeping focus.— Dr Stephen Labson, Director of Trans African Energy and lecturer at the University of Johannesburg
Listen to the role of the South African Reserve Bank explained: