Term:SOUTH AFRICAN RESERVE BANK

The South African 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 Bank Act of 10 August 1920 (the Act) and was the direct result of the abnormal monetary and financial conditions which had arisen during and in the period immediately following World War I. Its primary goals are to achieve monetary stability and economic growth in South Africa. The bank does this through control of monetary policy and regular Monetary Policy Committee (MPC) two-monthly meetings. If the economy is sluggish and not growing, then the MPC can reduce rates. This stimulates growth because it puts more money into everyone’s bank accounts (because they have to pay less interest). Alternatively it can increase interest rates to control inflation. The Reserve Bank also engages in what are known as “open market operations” where it buys and sells government bonds in the open market to fine tune the money supply. Your software contains 4 government bonds – the R186, the R207, R208 and the R209. You can look at the charts for these by just typing in their names into your software.

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