South Africa: Central Bank Transparency Code Review

This paper focuses on South Africa’s Central Bank Transparency Code Review. The South African Reserve Bank (SARB’s) strategic commitment to open and transparent communications should be anchored in a more robust institutional communication framework. Communications about the SARB’s role in the reform of the Gold and Foreign Exchange Contingency Reserve Account settlement framework and the implications for its financial autonomy should be further clarified. The SARB’s monetary policy framework is comprehensive, transparent and understandable, but would benefit from greater transparency about setting the inflation target, policy deliberations, and alternative risk scenarios. The SARB has significantly increased the transparency and accountability of its monetary policy framework by adopting appropriate communications vehicles to reach different audiences and by publishing model-based forecasts. The SARB would also benefit from enhancing the transparency of well-established governance arrangements and policies in some areas. It is recommended to strengthen the transparency of certain aspects of the SARB’s legal structure and autonomy, by providing a general explanation of the SARB’s legal protections and its institutional and functional autonomy.