South African Reserve Bank (SARB) Governor Lesetja Kganyago has reiterated that the central bank through the Financial Sector Contingency Forum (FSCF) continues to prepare for the unlikely event of a national grid failure to cushion the financial sector.
Kganyago was speaking at the release of the bank’s first Financial Stability Review for 2023. The objective of the Financial Sector Review is to communicate the bank’s views on the potential risks to financial system stability and the policy actions being taken to address these risks.
Kganyago says they are coordinating plans to mitigate the impact of the grid collapse.
“The SARB through the Financial Sector Contingency Forum continues to plan for the unlikely. But not an impossible scenario of a national electricity grid failure – in line with the role and function of the FSCF. Current efforts are centred around developing, coordinating and testing contingency plans to mitigate the impact of a national grid failure on the fin system and the economy,” adds Kganyago.
Last week, the Reserve Bank hiked interest rates by 50 basis points taking the prime lending rate from 11.25% to 11.75%. This marked the 10th increase, since November 2021, totalling 475 basis points over the period.
