Die aard, omvang en die dinamiek van die finansieël-monetêre markte waar binne die Suid-Afrikaanse institusionele belegger moet opereer
- Authors: Van Staden, Jan Adriaan
- Date: 2015-02-09
- Subjects: Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:13212 , http://hdl.handle.net/10210/13239
- Description: M.Com. (Economics) , Please refer to full text to view abstract
- Full Text:
- Authors: Van Staden, Jan Adriaan
- Date: 2015-02-09
- Subjects: Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:13212 , http://hdl.handle.net/10210/13239
- Description: M.Com. (Economics) , Please refer to full text to view abstract
- Full Text:
Economic growth and unemployment under alternative monetary policy regimes: evidence from South Africa
- Authors: Kifa, Masini Guylain
- Date: 2014-06-10
- Subjects: Monetary policy - South Africa , Inflation (Finance) - South Africa , Economic development - South Africa , Unemployment - South Africa , Foreign exchange rates - South Africa , Interest rates - South Africa , Monetary policy - Developing countries
- Type: Thesis
- Identifier: uj:11451 , http://hdl.handle.net/10210/11147
- Description: M.Com. (Economic Development and Policy Issues) , Monetary policy is not only the process by which the monetary authority of a country controls the supply of money, but is furthermore a sufficient tool to overcome the problem of economic growth and unemployment. This can take place when the policy instruments – interest rates (Repo) and money supply growth (M3) – have significant effects on these macroeconomic variables. However, the issue of the efficacy of monetary policy on GDP growth and employment creation is at the centre of debates among researchers. Some researchers are of the opinion that the objective of monetary policy in achieving and maintaining price stability is founded on the idea that inflation is not good for economic growth, employment creation and income equality but, instead, only secures macroeconomic environment. In South Africa, the efficiency of different monetary policy tools, inflation and money-supply targeting, on economic performance has been questioned. Moreover, the issue of the high level of unemployment remains controversial among scholars. Therefore, the structural vector-error correction model (VECM) methods was used with quarterly data in order to investigate the impact of aggregate money supply (M3), interest rate (Repo) and real exchange rate on CPIX (inflation) , economic growth (GDP volume rate) and unemployment (joblessness rate) in South Africa for the period 1986 to 2010. The results show that both monetary-policy regimes have positively impacted on economic growth, but the impact of the pre-inflation-targeting regime is higher. Moreover, a weak positive liaison between monetary policy and unemployment is observed, but the post-inflation-targeting regime shows a higher percentage decrease in unemployment than the pre-inflation targeting period. Beyond any doubt, the research approves the engagement of the SARB to monitor (target) CPIX (inflation) due to its ability to ensure price stability and create a stable economic environment favourable to economic performance.
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- Authors: Kifa, Masini Guylain
- Date: 2014-06-10
- Subjects: Monetary policy - South Africa , Inflation (Finance) - South Africa , Economic development - South Africa , Unemployment - South Africa , Foreign exchange rates - South Africa , Interest rates - South Africa , Monetary policy - Developing countries
- Type: Thesis
- Identifier: uj:11451 , http://hdl.handle.net/10210/11147
- Description: M.Com. (Economic Development and Policy Issues) , Monetary policy is not only the process by which the monetary authority of a country controls the supply of money, but is furthermore a sufficient tool to overcome the problem of economic growth and unemployment. This can take place when the policy instruments – interest rates (Repo) and money supply growth (M3) – have significant effects on these macroeconomic variables. However, the issue of the efficacy of monetary policy on GDP growth and employment creation is at the centre of debates among researchers. Some researchers are of the opinion that the objective of monetary policy in achieving and maintaining price stability is founded on the idea that inflation is not good for economic growth, employment creation and income equality but, instead, only secures macroeconomic environment. In South Africa, the efficiency of different monetary policy tools, inflation and money-supply targeting, on economic performance has been questioned. Moreover, the issue of the high level of unemployment remains controversial among scholars. Therefore, the structural vector-error correction model (VECM) methods was used with quarterly data in order to investigate the impact of aggregate money supply (M3), interest rate (Repo) and real exchange rate on CPIX (inflation) , economic growth (GDP volume rate) and unemployment (joblessness rate) in South Africa for the period 1986 to 2010. The results show that both monetary-policy regimes have positively impacted on economic growth, but the impact of the pre-inflation-targeting regime is higher. Moreover, a weak positive liaison between monetary policy and unemployment is observed, but the post-inflation-targeting regime shows a higher percentage decrease in unemployment than the pre-inflation targeting period. Beyond any doubt, the research approves the engagement of the SARB to monitor (target) CPIX (inflation) due to its ability to ensure price stability and create a stable economic environment favourable to economic performance.
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A macroeconomic model for the implementation of monetary policy
- Authors: Stals, Christian Lodewyk
- Date: 2009-07-29T05:40:57Z
- Subjects: Monetary policy - South Africa
- Type: Inaugural
- Identifier: uj:15048 , http://hdl.handle.net/10210/2756
- Description: Inaugural Honoris Causa lecture--Rand Afrikaans University, Department of Economics, 17 May 2000
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- Authors: Stals, Christian Lodewyk
- Date: 2009-07-29T05:40:57Z
- Subjects: Monetary policy - South Africa
- Type: Inaugural
- Identifier: uj:15048 , http://hdl.handle.net/10210/2756
- Description: Inaugural Honoris Causa lecture--Rand Afrikaans University, Department of Economics, 17 May 2000
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The impact of securitisation on the effectiveness of the bank lending channel in South Africa
- Kouo Ngamby Engome, Priscille Noelle
- Authors: Kouo Ngamby Engome, Priscille Noelle
- Date: 2014-06-10
- Subjects: Banks and banking - Security measures - South Africa , Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:11467 , http://hdl.handle.net/10210/11163
- Description: M.Com. (Financial Economics) , This study analyses the existence of a bank lending channel in South Africa and investigates the impact of the securitisation activity on the effectiveness of the bank lending channel during the period 2001–2010 using data from the South African banking sector. Structural Vector Auto Regression (SVAR) and Structural Vector Error Correction Model (SVECM) methods are used to interpret the impulse responses of bank lending to structural shocks (monetary policy) and to securitisation. The conclusion is that the bank lending channel is present and efficient in South Africa during the sample period with a lag and that securitisation acts as a shield against monetary impulses by constituting an additional source of funding for banks.
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- Authors: Kouo Ngamby Engome, Priscille Noelle
- Date: 2014-06-10
- Subjects: Banks and banking - Security measures - South Africa , Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:11467 , http://hdl.handle.net/10210/11163
- Description: M.Com. (Financial Economics) , This study analyses the existence of a bank lending channel in South Africa and investigates the impact of the securitisation activity on the effectiveness of the bank lending channel during the period 2001–2010 using data from the South African banking sector. Structural Vector Auto Regression (SVAR) and Structural Vector Error Correction Model (SVECM) methods are used to interpret the impulse responses of bank lending to structural shocks (monetary policy) and to securitisation. The conclusion is that the bank lending channel is present and efficient in South Africa during the sample period with a lag and that securitisation acts as a shield against monetary impulses by constituting an additional source of funding for banks.
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An econometric enquiry into the transmission mechanism in the South African economy
- Authors: Shostak, Efraim
- Date: 2014-10-29
- Subjects: Economics - South Africa - Mathematical models , Monetary policy - South Africa
- Type: Thesis
- Identifier: http://ujcontent.uj.ac.za8080/10210/370568 , uj:12702 , http://hdl.handle.net/10210/12567
- Description: Ph.D. (Economics) , The purpose of this study is to analyse the impact of monetary impulses on the South African economy. In analogy with the exact sciences, which use a laboratory to test hypotheses, this work will rely on a economic laboratory in the form of an econometric model. With the aid of this model, we will attempt to explore the dynamics of the various monetary impulses. In other words, this study will attempt to trace the flow over time of these monetary impulses through various channels toward the real economy. We will try to identify the main channels through which the monetary impulses flow and which convey their impact on the real economy. The system transmitting these impulses to the economy will be called the monetary transmission mechanism. This has always been viewed as a mysterious phenomenon as it is not yet clear how the money stock affects the economy, whether it affects the economic system directly or does so indirectly, via other channels. Nor is it clear whether money should be seen as a unique asset which affects the economic system, or whether it should be treated like any other asset. The importance attached to the money stock by the monetarists, for example, is defended by them on the grounds that the supply of money, which is controlled by the central authorities, affects the economy, because the authorities abuse their monopoly over the money supply. In our research we will evaluate this hypothesis concerning the exogeneity of the money stock. We will show that money should be classified like any other asset, as it is endogenous in nature. This endogeneity of the money stock is determined through the interaction of the money multiplier and the liquidity base, both of which contain endogenous elements.
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- Authors: Shostak, Efraim
- Date: 2014-10-29
- Subjects: Economics - South Africa - Mathematical models , Monetary policy - South Africa
- Type: Thesis
- Identifier: http://ujcontent.uj.ac.za8080/10210/370568 , uj:12702 , http://hdl.handle.net/10210/12567
- Description: Ph.D. (Economics) , The purpose of this study is to analyse the impact of monetary impulses on the South African economy. In analogy with the exact sciences, which use a laboratory to test hypotheses, this work will rely on a economic laboratory in the form of an econometric model. With the aid of this model, we will attempt to explore the dynamics of the various monetary impulses. In other words, this study will attempt to trace the flow over time of these monetary impulses through various channels toward the real economy. We will try to identify the main channels through which the monetary impulses flow and which convey their impact on the real economy. The system transmitting these impulses to the economy will be called the monetary transmission mechanism. This has always been viewed as a mysterious phenomenon as it is not yet clear how the money stock affects the economy, whether it affects the economic system directly or does so indirectly, via other channels. Nor is it clear whether money should be seen as a unique asset which affects the economic system, or whether it should be treated like any other asset. The importance attached to the money stock by the monetarists, for example, is defended by them on the grounds that the supply of money, which is controlled by the central authorities, affects the economy, because the authorities abuse their monopoly over the money supply. In our research we will evaluate this hypothesis concerning the exogeneity of the money stock. We will show that money should be classified like any other asset, as it is endogenous in nature. This endogeneity of the money stock is determined through the interaction of the money multiplier and the liquidity base, both of which contain endogenous elements.
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Predictability of monetary policy by the financial market in South Africa under the inflation targeting framework
- Mavee, Nasha Nikita Alexandre
- Authors: Mavee, Nasha Nikita Alexandre
- Date: 2014-03-03
- Subjects: South African Reserve Bank , Monetary policy - South Africa , Inflation (Finance) - South Africa
- Type: Thesis
- Identifier: uj:4217 , http://hdl.handle.net/10210/9575
- Description: M. Com. (Financial Economics) , The success of a monetary policy framework depends mostly on whether economic agents, especially the financial market participants, understand monetary policy decisions and are able to predict them in advance. Academics and practitioners agree that a successful Central Bank should be “boring” such that surprises about monetary policy should not arise in the announcements and the actions of the Bank, but rather in the macroeconomic developments. Thus policies that enhance clarity, transparency and communication between a Central Bank and the market can contribute to strengthening monetary policy predictability and improve the effectiveness of monetary policy itself. This dissertation assesses the predictability of the South African Reserve Bank’s (SARB) interest rate decisions since the adoption of the inflation targeting monetary policy framework in February 2000. Firstly, in order to evaluate predictability, money market forward rates are used to test whether the financial market is able to forecast the future level of policy rates, using the unbiased forward rate hypothesis. Then, using an event study methodology, changes in the money market forward rates following a monetary policy announcement are used to test whether the financial market participants were surprised by the SARB’s monetary policy decisions. The results of the unbiased forward rate hypothesis (UFRH) and the event study analysis indicate that, at least in the short term, specifically on a one-month-forward period, financial market participants have been able to predict the SARB’s monetary policy decisions with a high degree of accuracy. Moreover, the results of the event study analysis show that the South African financial market is at least semi-strong efficient, in the sense that monetary policy decisions are quickly incorporated in the market interest rates following the announcements. The event study analysis also provided some evidence that volatility in financial markets at the time of interest rate decisions has been declining over time.
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- Authors: Mavee, Nasha Nikita Alexandre
- Date: 2014-03-03
- Subjects: South African Reserve Bank , Monetary policy - South Africa , Inflation (Finance) - South Africa
- Type: Thesis
- Identifier: uj:4217 , http://hdl.handle.net/10210/9575
- Description: M. Com. (Financial Economics) , The success of a monetary policy framework depends mostly on whether economic agents, especially the financial market participants, understand monetary policy decisions and are able to predict them in advance. Academics and practitioners agree that a successful Central Bank should be “boring” such that surprises about monetary policy should not arise in the announcements and the actions of the Bank, but rather in the macroeconomic developments. Thus policies that enhance clarity, transparency and communication between a Central Bank and the market can contribute to strengthening monetary policy predictability and improve the effectiveness of monetary policy itself. This dissertation assesses the predictability of the South African Reserve Bank’s (SARB) interest rate decisions since the adoption of the inflation targeting monetary policy framework in February 2000. Firstly, in order to evaluate predictability, money market forward rates are used to test whether the financial market is able to forecast the future level of policy rates, using the unbiased forward rate hypothesis. Then, using an event study methodology, changes in the money market forward rates following a monetary policy announcement are used to test whether the financial market participants were surprised by the SARB’s monetary policy decisions. The results of the unbiased forward rate hypothesis (UFRH) and the event study analysis indicate that, at least in the short term, specifically on a one-month-forward period, financial market participants have been able to predict the SARB’s monetary policy decisions with a high degree of accuracy. Moreover, the results of the event study analysis show that the South African financial market is at least semi-strong efficient, in the sense that monetary policy decisions are quickly incorporated in the market interest rates following the announcements. The event study analysis also provided some evidence that volatility in financial markets at the time of interest rate decisions has been declining over time.
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The relationship between inflation, inflation uncertainty, and economic growth in South Africa
- Authors: Pretorius, Krüger
- Date: 2014-01-14
- Subjects: Inflation (Finance) , Economic development - South Africa , Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:7880 , http://hdl.handle.net/10210/8771
- Description: M.Comm. (Financial Economics) , This dissertation examines the relationship between inflation, inflation uncertainty, and economic growth using quarterly data for South Africa covering the period 1960-2012. Inflation uncertainty is estimated using the Generalized Autoregressive Conditional Heteroscedasticity modelling framework. Granger methods are employed in order to investigate the interaction between inflation, inflation uncertainty, and economic growth. The presence of structural change is investigated through dummy variables representing changes in monetary policy regime. No evidence is found of any significant structural change in either inflation or inflation uncertainty. Granger results indicate that inflation uncertainty has a negative impact on inflation, supporting Holland’s (1995) argument of stabilising central bank behaviour. Conversely, there is evidence that high inflation leads to elevated inflation uncertainty, in accordance with Friedman’s (1977) hypothesis. Inflation uncertainty does not have a significant impact on economic growth in South Africa. However, inflation does have an adverse effect on economic growth, whilst economic growth exerts a positive impact on the rate of inflation. Lastly, economic growth does not have any meaningful effect on inflation uncertainty.
- Full Text:
- Authors: Pretorius, Krüger
- Date: 2014-01-14
- Subjects: Inflation (Finance) , Economic development - South Africa , Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:7880 , http://hdl.handle.net/10210/8771
- Description: M.Comm. (Financial Economics) , This dissertation examines the relationship between inflation, inflation uncertainty, and economic growth using quarterly data for South Africa covering the period 1960-2012. Inflation uncertainty is estimated using the Generalized Autoregressive Conditional Heteroscedasticity modelling framework. Granger methods are employed in order to investigate the interaction between inflation, inflation uncertainty, and economic growth. The presence of structural change is investigated through dummy variables representing changes in monetary policy regime. No evidence is found of any significant structural change in either inflation or inflation uncertainty. Granger results indicate that inflation uncertainty has a negative impact on inflation, supporting Holland’s (1995) argument of stabilising central bank behaviour. Conversely, there is evidence that high inflation leads to elevated inflation uncertainty, in accordance with Friedman’s (1977) hypothesis. Inflation uncertainty does not have a significant impact on economic growth in South Africa. However, inflation does have an adverse effect on economic growth, whilst economic growth exerts a positive impact on the rate of inflation. Lastly, economic growth does not have any meaningful effect on inflation uncertainty.
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Monetary process in South Africa : an econometric model approach
- Authors: Shostak, Efraim
- Date: 2015-11-13
- Subjects: Monetary policy - South Africa , Econometrics
- Type: Thesis
- Identifier: http://ujcontent.uj.ac.za8080/10210/386793 , uj:14572 , http://hdl.handle.net/10210/15104
- Description: M.Com. (Economics) , Please refer to full text to view abstract
- Full Text:
- Authors: Shostak, Efraim
- Date: 2015-11-13
- Subjects: Monetary policy - South Africa , Econometrics
- Type: Thesis
- Identifier: http://ujcontent.uj.ac.za8080/10210/386793 , uj:14572 , http://hdl.handle.net/10210/15104
- Description: M.Com. (Economics) , Please refer to full text to view abstract
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Inflation targeting : an unrecognised dilemma for South Africa
- Authors: Zidel, Hillel L.
- Date: 2012-09-05
- Subjects: Inflation (Finance) , Monetary policy - South Africa , Inflation (Finance) - South Africa
- Type: Thesis
- Identifier: uj:9626 , http://hdl.handle.net/10210/7045
- Description: M.Comm. , The overall objective of this study was to determine the appropriateness of Inflation Targeting to South Africa, or of South Africa's suitability for Inflation Targeting. For that reason, I shall produce information that will aid in the determination of whether the South African Reserve Bank has been correct in their adoption of this framework, and to propose an alternative, more all-encompassing option. The research design used in this study in terms of Tripodi, Fellin and Meyer's (1982:40) classification can be termed as a hybrid of the exploratory and the quantitative-descriptive designs. Chapter 1 introduces the reader to the research paper. This chapter incorporates the rationale and importance of the study, its methodology, hypothesis, limitations, aims, and referencing method. It sets out clear aims and objectives for the thesis while providing an overview of the material. To facilitate the analysis of Inflation Targeting in South Africa it was vital to have a clear and accurate understanding of what Inflation Targeting is. The definition and an analysis of the definition are covered in Chapter 2. As other authors have detailed this aspect voluminously, it is just dealt with summarily in this section. Chapter 3 discusses the requirements for Inflation Targeting as set out by the authorities. These factors are primarily of a technical nature. While the information garnered for this section is invaluable, it is inadequate in isolation. Countries' individual circumstances play an important role, and need to be considered along with the purely technical requirements for Inflation Targeting. This chapter is important in the analysis as it provides an important yardstick for the analysis of the requirements in South Africa. In order to attain an enhanced grasp of Inflation Targeting and its potential impact and effects on South Africa, it is imperative to take lessons from other countries where the framework has been implemented. Chapter 4 analyses international experiences with Inflation Targeting, with the main aim of learning from the experience of developed and, more importantly, developing nations. The paper then moves into the most important section: that of South Africa. Once a full understanding of what Inflation Targeting involves is obtained, both theoretically and empirically, we are in a position to consider where South Africa fits in. South African monetary policy is evaluated briefly, while the technical requirements of Inflation Targeting are analysed in their South African context. Various problems are discussed with the applicability of the framework to South Africa. The later part of this section analyses technical and socio-political complicating factors, while a description is provided of a suggested alternative framework. The final chapter concludes that South Africa is, indeed, almost certainly "less than suitable" for Inflation Targeting and suggests that a more holistic framework of a "GEAR-type" nature is more likely to be appropriate to a country with the uniqueness of South Africa.
- Full Text:
- Authors: Zidel, Hillel L.
- Date: 2012-09-05
- Subjects: Inflation (Finance) , Monetary policy - South Africa , Inflation (Finance) - South Africa
- Type: Thesis
- Identifier: uj:9626 , http://hdl.handle.net/10210/7045
- Description: M.Comm. , The overall objective of this study was to determine the appropriateness of Inflation Targeting to South Africa, or of South Africa's suitability for Inflation Targeting. For that reason, I shall produce information that will aid in the determination of whether the South African Reserve Bank has been correct in their adoption of this framework, and to propose an alternative, more all-encompassing option. The research design used in this study in terms of Tripodi, Fellin and Meyer's (1982:40) classification can be termed as a hybrid of the exploratory and the quantitative-descriptive designs. Chapter 1 introduces the reader to the research paper. This chapter incorporates the rationale and importance of the study, its methodology, hypothesis, limitations, aims, and referencing method. It sets out clear aims and objectives for the thesis while providing an overview of the material. To facilitate the analysis of Inflation Targeting in South Africa it was vital to have a clear and accurate understanding of what Inflation Targeting is. The definition and an analysis of the definition are covered in Chapter 2. As other authors have detailed this aspect voluminously, it is just dealt with summarily in this section. Chapter 3 discusses the requirements for Inflation Targeting as set out by the authorities. These factors are primarily of a technical nature. While the information garnered for this section is invaluable, it is inadequate in isolation. Countries' individual circumstances play an important role, and need to be considered along with the purely technical requirements for Inflation Targeting. This chapter is important in the analysis as it provides an important yardstick for the analysis of the requirements in South Africa. In order to attain an enhanced grasp of Inflation Targeting and its potential impact and effects on South Africa, it is imperative to take lessons from other countries where the framework has been implemented. Chapter 4 analyses international experiences with Inflation Targeting, with the main aim of learning from the experience of developed and, more importantly, developing nations. The paper then moves into the most important section: that of South Africa. Once a full understanding of what Inflation Targeting involves is obtained, both theoretically and empirically, we are in a position to consider where South Africa fits in. South African monetary policy is evaluated briefly, while the technical requirements of Inflation Targeting are analysed in their South African context. Various problems are discussed with the applicability of the framework to South Africa. The later part of this section analyses technical and socio-political complicating factors, while a description is provided of a suggested alternative framework. The final chapter concludes that South Africa is, indeed, almost certainly "less than suitable" for Inflation Targeting and suggests that a more holistic framework of a "GEAR-type" nature is more likely to be appropriate to a country with the uniqueness of South Africa.
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Die ekonometriese modellering van die Suid-Afrikaanse monetêre stelsel
- Authors: De Wet, Melanie
- Date: 2014-04-14
- Subjects: Econometric models , Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:10621 , http://hdl.handle.net/10210/10142
- Description: M.Comm. (Econometrics) , Please refer to full text to view abstract
- Full Text:
- Authors: De Wet, Melanie
- Date: 2014-04-14
- Subjects: Econometric models , Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:10621 , http://hdl.handle.net/10210/10142
- Description: M.Comm. (Econometrics) , Please refer to full text to view abstract
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'n Teoretiese en ekonometriese evaluering van monetêre beleid in Suid-Afrika
- Authors: Laubscher, Ilse
- Date: 2015-02-11
- Subjects: Monetary policy - Econometric models , Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:13276 , http://hdl.handle.net/10210/13297
- Description: M.Com. (Econometrics) , The main objective of this study was to formulate and evaluate a set of equations that adequately represents the South African monetary system. The analytical framework of the study is based on a theoretical examination of the process of formulating monetary policy. The main objectives of monetary policy was identified as price stability, a high rate of economic growth, exchange rate stability and an acceptable balance of payments situation. The achievement of these goals is dependent on the central bank's choice of target variables and policy instruments. The monetary system of South Africa was analysed by examining the various goals, target variables and policy instruments that constitute the South African Reserve Bank's monetary policy. The nature and impact of the new banking legislation which was introduced in South Africa on 1 February 1991 when the Deposit-taking Institutions Act of 1990 came into effect, was also discussed in the study. As a result of the high level of abstraction of the monetary phenomenon and the dynamic and interdependent nature of monetary policy, econometric and statistical techniques and criteria were used to evaluate certain aspects of the South African monetary system.
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- Authors: Laubscher, Ilse
- Date: 2015-02-11
- Subjects: Monetary policy - Econometric models , Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:13276 , http://hdl.handle.net/10210/13297
- Description: M.Com. (Econometrics) , The main objective of this study was to formulate and evaluate a set of equations that adequately represents the South African monetary system. The analytical framework of the study is based on a theoretical examination of the process of formulating monetary policy. The main objectives of monetary policy was identified as price stability, a high rate of economic growth, exchange rate stability and an acceptable balance of payments situation. The achievement of these goals is dependent on the central bank's choice of target variables and policy instruments. The monetary system of South Africa was analysed by examining the various goals, target variables and policy instruments that constitute the South African Reserve Bank's monetary policy. The nature and impact of the new banking legislation which was introduced in South Africa on 1 February 1991 when the Deposit-taking Institutions Act of 1990 came into effect, was also discussed in the study. As a result of the high level of abstraction of the monetary phenomenon and the dynamic and interdependent nature of monetary policy, econometric and statistical techniques and criteria were used to evaluate certain aspects of the South African monetary system.
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Die teoretiese grondslag van die De Kock-kommissie se verslag oor die monetêre stelsel en monetêre beleid in Suid-Afrika
- Authors: Van Zyl, Gerhardus
- Date: 2014-04-16
- Subjects: Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:10797 , http://hdl.handle.net/10210/10304
- Description: M.Com. (Economics) , The theoretical principle of the Report is by no means clearly outlined by the Commission although the Report states that it was compiled by experts. The study tried to identify the position of the Report within the broad spectrum of beliefs on monetary policy. For the purpose of analysis, the Monetaristic School, the Keynesian School as well as the ultra free market approach of the Austrian School of Economists were looked at specifically. The study yielded interesting results such as: * The disparagement of the Report of a fixed money supply rule and interest rates which are not allowed to find their own levels at all times, forms an unbridgeable gap between the monetarists and the Commission. Of the most important incidences between the two viewpoints is the fact that inflation is regarded as a monetary phenomenon and that direct control measures are rejected. * The fact that the Report recommends that the money supply be controlled from the demand side and that we therefore, at least in the short term, have to do with an endogenous money supply which is determined by the demand therefore, supports the view of the Keynesian School. * No definite incidences between the Report and the ultra free market approach could be identified. * A more functional approach implies that discretionary decision making power of the monetary authorities ought to be scaled down and altered as the approach of the Commission with regard to control over the money supply is being questioned. The reason for this is that behavourial variables that the Commission tries to influence are not known variables. * A money supply rule in South Africa can presently not be applied effectively as a result of the fact that all markets in the economy are not fully competitive. * It is recommended that more freedom can be g,ranted to the private banking sector in the form of the denationalization of money. It can for example take place through extensive scaling down in discount rendering by the Reserve Bank. Banks are consequently forced to keep their own reserves and to create money on the basis of their current reserves. That alone forms a control mechanism over the creation of money because of the fact that competition between banks will ensure that no bank would like its currency to depreciate against the currencies of the other banks as a result of excessive money creation.
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- Authors: Van Zyl, Gerhardus
- Date: 2014-04-16
- Subjects: Monetary policy - South Africa
- Type: Thesis
- Identifier: uj:10797 , http://hdl.handle.net/10210/10304
- Description: M.Com. (Economics) , The theoretical principle of the Report is by no means clearly outlined by the Commission although the Report states that it was compiled by experts. The study tried to identify the position of the Report within the broad spectrum of beliefs on monetary policy. For the purpose of analysis, the Monetaristic School, the Keynesian School as well as the ultra free market approach of the Austrian School of Economists were looked at specifically. The study yielded interesting results such as: * The disparagement of the Report of a fixed money supply rule and interest rates which are not allowed to find their own levels at all times, forms an unbridgeable gap between the monetarists and the Commission. Of the most important incidences between the two viewpoints is the fact that inflation is regarded as a monetary phenomenon and that direct control measures are rejected. * The fact that the Report recommends that the money supply be controlled from the demand side and that we therefore, at least in the short term, have to do with an endogenous money supply which is determined by the demand therefore, supports the view of the Keynesian School. * No definite incidences between the Report and the ultra free market approach could be identified. * A more functional approach implies that discretionary decision making power of the monetary authorities ought to be scaled down and altered as the approach of the Commission with regard to control over the money supply is being questioned. The reason for this is that behavourial variables that the Commission tries to influence are not known variables. * A money supply rule in South Africa can presently not be applied effectively as a result of the fact that all markets in the economy are not fully competitive. * It is recommended that more freedom can be g,ranted to the private banking sector in the form of the denationalization of money. It can for example take place through extensive scaling down in discount rendering by the Reserve Bank. Banks are consequently forced to keep their own reserves and to create money on the basis of their current reserves. That alone forms a control mechanism over the creation of money because of the fact that competition between banks will ensure that no bank would like its currency to depreciate against the currencies of the other banks as a result of excessive money creation.
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The purpose and transparency of the repurchase agreement in the South African financial system
- Authors: Steenkamp, Juanita.
- Date: 2012-08-17
- Subjects: Repurchase agreements - South Africa. , Monetary policy. , Monetary policy - South Africa , Inflation (Finance)
- Type: Thesis
- Identifier: uj:2625 , http://hdl.handle.net/10210/6072
- Description: M.Comm. , Under the previous accommodation system the monetary policy of the South African Reserve Bank failed to operate by means of open market transactions, and interest rate movements was solely the discretion of the South African Reserve Bank and was driven by means of the traditional Bank rate. The need for a more efficient and transparent accommodation system that is based on open market transactions and determined by demand and supply of liquidity was evident, and therefore the introduction of the repurchase agreement system in March 1998 was unavoidable. The ultimate objective of monetary policy is to achieve price stability, i.e. to ensure that the Reserve Bank has a goal of maintaining inflation at a level that would be more or less in line with the average rate of inflation in the economies of South Africa's major trading partners and international competitors. It is important that the Reserve Bank enhances transparency for the effective operation of an inflation-targeting framework. Transparency introduces predictability and helps to ensure that market expectations are consistent with the objective of price stability. The level of interest rates in a country can influence price stability directly. A transparent monetary policy will mean that changes in short-term interest rates should not surprise the market. Markets should anticipate decisions taken by the Reserve Bank and therefore transparency should promote the predictability of monetary policy. Since its implementation, the current accommodation system (repurchase agreement) has raised some concerns regarding transparency. The government's new monetary policy framework of inflation targeting also has some limitations that can influence the achieving of such targets. The one influences the other, and if interest rates and inflation is not managed transparently, it will have a severe impact on the overall efficiency of monetary policy in South Africa.
- Full Text:
- Authors: Steenkamp, Juanita.
- Date: 2012-08-17
- Subjects: Repurchase agreements - South Africa. , Monetary policy. , Monetary policy - South Africa , Inflation (Finance)
- Type: Thesis
- Identifier: uj:2625 , http://hdl.handle.net/10210/6072
- Description: M.Comm. , Under the previous accommodation system the monetary policy of the South African Reserve Bank failed to operate by means of open market transactions, and interest rate movements was solely the discretion of the South African Reserve Bank and was driven by means of the traditional Bank rate. The need for a more efficient and transparent accommodation system that is based on open market transactions and determined by demand and supply of liquidity was evident, and therefore the introduction of the repurchase agreement system in March 1998 was unavoidable. The ultimate objective of monetary policy is to achieve price stability, i.e. to ensure that the Reserve Bank has a goal of maintaining inflation at a level that would be more or less in line with the average rate of inflation in the economies of South Africa's major trading partners and international competitors. It is important that the Reserve Bank enhances transparency for the effective operation of an inflation-targeting framework. Transparency introduces predictability and helps to ensure that market expectations are consistent with the objective of price stability. The level of interest rates in a country can influence price stability directly. A transparent monetary policy will mean that changes in short-term interest rates should not surprise the market. Markets should anticipate decisions taken by the Reserve Bank and therefore transparency should promote the predictability of monetary policy. Since its implementation, the current accommodation system (repurchase agreement) has raised some concerns regarding transparency. The government's new monetary policy framework of inflation targeting also has some limitations that can influence the achieving of such targets. The one influences the other, and if interest rates and inflation is not managed transparently, it will have a severe impact on the overall efficiency of monetary policy in South Africa.
- Full Text:
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