ASSIGNMENT TOPIC (ECO 121) 2017

20 June 2017 by Sunita Menon

The Reserve Bank is set to challenge the public protectors recommendation on changing
its mandate.
The Bank said in a statement on Tuesday that the ordered remedial action directing
Parliament to change the Constitution to amend the Reserve Banks powers, had had an
immediate and negative impact on the markets and the exchange rate of the rand.
Public Protector Busisiwe Mkhwebane ordered the change as part of the remedial actions
in the CIEX report investigation, released at a briefing in Pretoria on Monday.
It would effectively put an end to inflation targeting, a core tenet of the Banks monetary
policy.
Mkhwebanes proposed change is that the Banks primary objective should be to "promote
balanced and sustainable economic growth in the republic while ensuring the
socioeconomic wellbeing of the citizens is protected".
Source: Businessday, 2017

Based on the above article, write an assignment on the role of the South African Reserve
Bank in the countrys economy. Furthermore, discuss in detail the role that the National
Treasury plays in the South African economy.
The assignment should be structured as follows:
Introduction
Briefly discuss the importance of financial inclusion (access to financial services) in the
context of economic growth. Furthermore, clearly outline the structure of the assignment.
Body of the assignment
Provide a trend analysis of interest rates and economic growth for the past three years.
Provide a brief history of the South African Reserve Bank and further discuss its objectives in
detail with regard to its role in the countrys economy. Thereafter, discuss in detail the role
and objectives of the National Treasury in the South African economy.
Conclusion
Based on your analysis of the two institutions roles and objectives, comment on whether or
not do these two institutions complement each other. If yes, explain how and provide
examples making use of available evidence. If no, explain the root cause for such and provide
possible solutions as to how this can be corrected.

Sources of information:
South African Reserve Bank Website: https://www.resbank.co.za
National Treasury website: https://www.treasury.gov.za
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Due date: 24th August 2017

BEFORE 16H00