A BRIEF NOTE ON NEL AND LEKALAKE: MONETARY TRANSPARENCY IN SOUTH AFRICA

Abstract

IN NEL AND LEKALAKE (2004), monetary policy transparency in South Africa is addressed, focusing on the SA Reserve Bank's compliance with the Code of Good Practices on Transparency in Monetary Policy (IMF, 2000) and assessing whether the Bank has been effective in introducing transparency in South Africa. The study also offers some recommendations on how monetary policy transparency could be improved. Although the study by Nel and Lekalake offers a useful insight into monetary policy transparency based on the application of the codes of the IMF, it is argued in this brief note that the study took neither full cognisance of the Reserve Bank's unique ownership structure supporting monetary policy transparency, nor of the insights gained by the Bank from past experiences. This brief note therefore highlights the Bank's ownership structure and then comments on certain of the recommendations made by Nel and Lekalake. 1. UNIQUE OWNERSHIP STRUCTURE OF THE RESERVE BANK