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South African Reserve Bank

Evolution of Reserves Management 

Prior 1999-The Bank focuses mainly on liquidity management and its foreign reserves are predominantly in US dollars.  In 1998 SARB takes deliberate steps to make use of the favourable external environment to accumulate reserves, which included the buying of foreign exchange as and when market conditions permit, purchasing the proceeds of the National Treasury’s foreign loans and absorbing portions of large FDI transactions.
1999          The First External Fund Management programme (EFMP) is launched with its main objectives of building internal capacity through skills and technology transfer and to diversity the risk/return characteristics of the reserves.
2001          The first Reserves Management Investment Policy is approved by the GEC
2002          Additional private sector external fund managers are appointed as the level of reserves increases.
2003          The Bank closes out its oversold forward position in February 2003.
2004          The first internally managed global bond portfolio is rolled out and actively managed by SARB portfolio agers.  This portfolio consists mainly of government bonds.
2005          The Securities Lending programme is launched with the view to recover custody and external management fees associated with the EFMP and two official institutions are appointed to the EFMP.
2006          The Bank joins RAMP (World Bank’s Reserves Advisory and Management Programme).  Under this programme, the World Bank provides investment management services, advisory services and training to official sector reserve mangers with the goal of enabling them to manage foreign currency reserves more efficiently.
2007          The Bank reviews its Reserves Management Investment Policy, to enhance the strategic and operational framework and to define the criteria for the management of reserves.  The first comprehensive Strategic Asset Allocation (SAA) is implemented to align the reserve tranches’ risk parameters with that of the Bank’s risk tolerance, and to establish the strategic benchmarks against which reserves would be managed.  During this period additional internally managed portfolios are rolled out.
2010          The Reserves management Investment Policy is further enhanced to strengthen the governance structure for reserves management and to reconfigure and strengthen the Reserves Management committee.  SARB repays its final foreign loan in June that year.
2011          Both the internally and externally managed portfolios are topped-up with additional reserves as part of the SARB’s reserves accumulation strategy.
2013          The trading of bond futures is introduced to the internally managed portfolios to enhance the efficiency of portfolio management.
2014          The investment mandate for the internally managed reserves expends to countries such as China, South Korea, Japan, Australia, Sweden and Canada.
2015          SARB signs a bilateral swap agreement with the People’s Bank of China (PBoC).  The agreement allows for the exchange of local currencies between the two central banks of up to CNY 30 billion.  SARB signs a Memorandum of Understanding on Renminbi Clearing Arrangements in South Africa for the purpose of clearing and settlement of Renminbi in South Africa.
SARB signs the multilateral Inter-Central Bank Agreement (ICBA) with BRICS Central Banks with the objective of implementing the Contingent Reserve Arrangement (CRA) as announced in July 2014, at the BRICS Summit in Brazil. awards the 2015 ‘Reserve Manager of the Year Award’ to the South African Reserve Bank (SARB).  This is in recognition of the measures taken by the SARB to ensure resilience during a challenging year for emerging markets, and in addressing the fundamental change in perceptions of risk and return under which reserve managers operate in a post-crisis world.
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