The South African Reserve Bank turns 100

The SA Reserve Bank on Wednesday marked its 100-year anniversary, and it is a “solid institution” of which South Africans can be proud, Governor Lesetja Kganyago said.

During the virtual centenary celebrations, Kganyago, the tenth governor of the bank, outlined key developments in the central bank’s history. 

The bank steered the country’s financial system through the Great Depression in the 1930s, World War 2, apartheid, the oil crisis of the 1970s, the global financial crisis in 2008/09 and the recent Covid-19 pandemic.

The bank is also celebrating 25 years of independence. Its shareholders are not involved in policy setting or regulation. 

“Institutions in a democracy matter, and quality institutions matter even more. The SARB is one such a quality institution and South Africa can be proud of that,” he said.

Populist central bankers spell trouble

Finance Minister Tito Mboweni, who was the eighth governor of the bank, delivered the keynote address.

He had first been appointed advisor to the Reserve Bank governor by former President Thabo Mbeki in 1998, before taking the reins of the bank in August 1999.

“At the time when I became an advisor to the governor, there was an expectation that because I had been a former Cabinet minister, my association with the central bank then would mean the era of cheap money had arrived,” Mboweni recalled.

“I made it clear on the day when I was inaugurated as governor, that such thoughts would be severely disappointed.

“Central bankers are not populists. If you meet a populist central banker anywhere that is normally the beginning of trouble in that country,” Mboweni said.

During his time at the bank, Mboweni had worked on the establishment of the monetary policy committee, and introduced media briefings to announce decisions. A practice which continues.

Source: Fin24

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