## 1zafea2023003 ## Source details **Canonical URL:** [1zafea2023003](https://www.imf.org/-/media/files/publications/cr/2023/english/1zafea2023003.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2023/english/1zafea2023003.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2023/english/1zafea2023003.pdf.json) --- ### Mission scope and objectives - A remote monetary and financial statistics (MFS) technical assistance (TA) mission took place during August 10–23, 2022, at the request of the South African Reserve Bank (SARB) with support from the IMF’s African Department (AFR). - Objective: assist the SARB in ensuring South Africa’s monetary data are compiled in compliance with the 2016 Monetary and Financial Statistics Manual and Compilation Guide (MFSMCG), including full coverage of the other depository corporations (ODCs) sector, using the standardized report forms (SRFs) developed by the IMF’s Statistics Department (STA). ### Compliance, mapping, and bridge tables — key findings - Once the mission’s recommendations are implemented, both the central bank survey (CBS) and the ODCs survey (ODCS) will fully comply with the methodology of the MFSMCG. - The mission reviewed bridge tables generating SRFs for the central bank (1SR) and ODCs (2SR) and detected shortcomings in mapping from source data to 1SR and 2SR regarding classification and sectorization of financial instruments. - Particular attention was given to recording and reporting of IMF accounts within the central bank data (1SR). - The mission developed bridge tables from source data of: - money market funds (MMFs), - the Land Bank, - Ithala SOC, to map to 2SR. ### Monetary aggregates and reclassifications — quantified impacts - MMFs currently included with non-MMF investment funds in the other financial corporations (OFC) sector; once reclassified to the ODCs sector and mapped via the mission’s bridge table, this will affect broad money. - The mission estimated that reclassifying the MMFs from the OFCs to the ODCs sector will increase broad money by two to three percent. - At end-2021, broad money in South Africa was ZAR 4,353 billion. - Claims of MMFs on ODCs included in broad money (deposits and debt securities) were ZAR 312 billion. - Liabilities of MMFs that should be included in broad money were ZAR 415 billion. - Subtracting intersectoral positions and adding MMFs’ liabilities to money-holding sectors result in a revised broad money of ZAR 4,456 billion. ### Financial system structure and size (selected statistics) - Total assets of the financial corporations’ sector, excluding the SARB, at end-March 2022, were above 21,000 billion rands (ZAR), approximately US $1,400 billion or 3.3 times the size of the country’s GDP. - The SARB includes one financial subsidiary (Corporation for Public Deposits, CPD) whose accounts are consolidated with the SARB for the CBS. - The ODCs sector is dominated by commercial banks constituting 95 percent of its total assets. - Fifty-three MMFs (unit trusts) raise funds from the public and constitute 5 percent of the ODC sector’s total assets. - Total assets of OFCs are almost twice those of ODCs; non-MMF investment funds number 1,653 with assets of ZAR 3,200 billion. ### Priority recommendations, targets, and responsibilities (selected) - Compile 1SR incorporating the recommended reclassifications in the updated bridge table prepared by the mission and report it to STA with revisions in historical data starting from December 2018 onwards. — Target: April 2023. — Responsible: ESD. - Compile 2SR incorporating the recommended reclassifications in the updated bridge table prepared by the mission and report it to STA with revisions in historical data starting from December 2018 onwards. — Target: April 2023. — Responsible: ESD. - Expand the coverage of the ODCS, reclassifying the accounts of MMFs from the OFCs (4SR) to the ODCs (2SR) subsector using the bridge table developed by the mission for data reporting to STA. — Target: May 2023. — Responsible: ESD. - Improve the recording of the IMF accounts in 1SR including revising historical data from December 2018 as recommended by the mission. — Target: April 2023. - Eliminate all manual adjustments currently performed when compiling bridge tables for 1SR; if accounts with negative balances need reclassification, implement through built-in “if” conditions. — Target: April 2023. - Introduce a more granular call report form for the submission of banks’ data to the SARB. — Target: June 2024. - Include in the ODCS the accounts of Ithala SOC, splitting them from IDFC (classified as OFCs) from January 2023. — Target: June 2023. - The ESD to prepare a methodological note explaining the reclassification of MMFs to the ODC sector and its impact on monetary aggregates. — Target: April 2023. - The SARB to evaluate the option of increasing consistency between monetary statistics disseminated nationally and those disseminated through the IMF by using STA’s Integrated Monetary Database (IMD) as the source for national statistics. — Target: June 2024. ### Operational notes on source data, trial balances, and ACRs - The central bank comprises two institutional units (the SARB and the CPD); the MBU produces a bridge table for each institution from their trial balances and consolidates partial SRFs into one 1SR. - Similar trial balance accounts are clustered into groups and mapped to the bridge table; the internal system (ERP-RMT) groups accounts under time series codes for mapping to the bridge table that generates 1SR. - New accounts are classified using a “nearest neighbor” algorithm; when uncertain, the MBU consults the Financial Services Department (FSD) accounting team. - The trial balance lacks sub-account level detail; the MBU obtains disaggregated sub-account balances from Account Class Reports (ACRs). - SARB: ACRs are used basically as a control tool and not as a source for more granular data. - CPD: ACRs are used at the sub-account level to populate the source file for the bridge table. - The mission detected systematic discrepancies between SARB’s trial balance account balances and the aggregation of sub-accounts in the ACRs since September 2021; MBU is investigating with FSD and, if fixed, should use ACRs’ more granular data when producing the SARB bridge table. ### IMF accounts — recording, misclassifications, and required reclassifications Findings and issues: - SARB acts as fiscal agent and depository institution for the NT’s relations with the IMF; transactions are recorded by both NT and SARB and sometimes duplicated. - Two risks: - (i) duplication of foreign assets or liabilities between NT financial statements and SARB data reported to the International Reserves Data Template. - (ii) when compiling the CBS, STA substitutes central bank reported data with IMF Finance Department (FIN) records; only positions kept in the SARB’s books should be replaced by FIN records, not those recorded in NT accounts. - SDR Holdings and related accounts: - NT has deposited its holdings of SDRs with the SARB. SARB reports them in 1SR as Holdings of SDRs and includes them in international reserves on its website. - SARB created a matching liability to NT for SDR holdings in account 5003 Treasury SDR Deposit Account. - In 1SR account 5003 is classified as Transferable Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC. - Account 5003 is revalued monthly to reflect the R/SDR exchange rate and should be classified as denominated in foreign currency in 1SR mapping. - SDR Allocations: - Liability for SDR allocations was assumed by the NT and presented in its financial statements as a foreign liability. - SARB eliminated SDR Allocations from 1SR starting in April 2022 and transferred the balance to Transferable Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC; the revision should be made for the whole historical series. - NT reported end-March 2021 amount equivalent to SDR 2,623.2 million, while FIN’s records indicate cumulative allocations for SDR 1,785.4 million. - Reserve Tranche Position (RTP) and related misclassifications: - RTP is recorded using accounts 15107 IMF SDR FTP and 15108 IMF SDR Quota; aggregated balances match FIN’s records for RTP. - Misclassifications in 1SR: - Account 15107 is classified as Securities Included in Official Reserve Assets, FC (incorrect). - Account 15108 is classified as Holdings of SDRs (incorrect). - Both should be classified in 1SR as Other Deposits Included in Official Reserve Assets, FC – Reserve Position in the IMF. - Double counting of account 15107 in the CBS increases SARB’s net foreign assets by ZAR 7.7 billion, or 0.8 percent. - Deposits recording SARB’s liability to NT for RTP: - Accounts 5006 IMF RTP Deposits and 5007 NT IMF SDR Quota record the liability. - Account 5007 currently classified in 1SR as Transferable Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC but should be reclassified as denominated in foreign currency. - Account 5006 is missing from the bridge table and should be mapped to it; it should be classified as Transferable Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC. - Lending to the IMF: - SARB has a claim on the IMF for a loan under the New Agreement to Borrow in account 15106 IMF – NAB FTP Account. - Account 15106 is misclassified in 1SR as Securities Included in Official Reserve Assets, FC and needs reclassification to Loans Nonresidents, FC – Loans to IMF. - IMF No. 1 and No. 2 Accounts: - IMF No. 1 Account is used by SARB to record yearly revaluations per FIN instructions; balance is around two percent of the country’s quota in the IMF. - IMF No. 1 and IMF No. 2 are currently included by the MBU in account 2301 SARB Other Customers GL Roll-up Account (DCR0020) and should be separated and reclassified in 1SR as IMF Accounts No. 1 and Securities, NC and IMF Account No. 2 respectively. - Income and expense accounts related to the IMF (5002, 23301, 31204) are misclassified in 1SR as asset or liability accounts and should be reclassified to Current Year Result within Shares and Other Equity. - Overall: mission reclassified many IMF-related accounts in the bridge table for 1SR and recommends revising time series backwards correspondingly. Recommendations for IMF accounts - Improve the recording of the IMF accounts in the 1SR including revising historical data from December 2018. - Coordinate with the NT on the dissemination of data related to the country’s transactions with the IMF. ### Accounts in overdraft — identification and automation Findings: - Clustering individual accounts risks misclassifying deposit accounts in overdraft; overdrafts should be classified as loans, not netted against other account holders. - Aggregation into a single group prevents detection of overdraft accounts. Recommendations: - Use ACRs for individual deposit accounts instead of grouping them in one time series code, once master account balances in SARB’s trial balance consistently match aggregation of sub-accounts in ACRs. - Automate reclassification: create an “if” condition in the bridge table so that deposits with negative balances (assets or liabilities) are reclassified as loans to the other side of the balance sheet. ### Provincial government deposits — classification guidance Findings and guidance: - Provincial government deposits with the CPD are currently classified in 1SR as central government deposits excluded from broad money and monetary base. - MFSMCG (paragraph 6.73) recommends considering provincial governments as a money-holding sector because their behavior is closer to other money-holding sectors. - STA Government Finance Division staff indicated provincial and local governments have own revenues and wide spending discretion, closer to a money-holding sector. - ESD considers provincial governments largely funded through national grants/transfers and therefore their deposits should be excluded from broad money. Mission position and recommendation: - Independently of inclusion/exclusion from broad money, provincial government deposits should not be presented as part of central government’s deposits. - Reclassify all provincial government deposits in 1SR from Deposits Central Government to Deposits State and Local Governments. - The mission opines these deposits should be included in the national definition of broad money. ### Manual adjustments — diagnosis and elimination Findings: - Manual adjustments are performed in bridge tables to eliminate mapping differences: - MBU introduces Control Accounts on asset (DCR0208) and liability (DCR1212) sides for SARB, and balancing items for CPD. - These manual adjustments represent between half and one percent of total assets for SARB and are negligible for CPD. - Manual adjustments are used to reclassify accounts with negative balances by moving them to the other side of the balance sheet. Recommendations: - Eliminate all manual adjustments currently performed when compiling the bridge tables for 1SR. - If accounts with negative balances need reclassification, implement it through a built-in “if” condition in the bridge table rather than manual intervention. - If vertical checks reveal differences in bridge table compilation, investigate and solve root causes rather than erase differences. ### Data issues in 1SR — SARB-specific reclassifications and operational improvements Major actions and specific account reclassifications: - Review account grouping in ACRs to ensure MFSMCG methodology consistency; verify nonresident bank labels (e.g., SCBLA, SSBRA). - Consolidate income and expense accounts mapped to Current Year Result into one or two entries using accumulated income from the beginning of the fiscal year (source: SARB’s Income Statement). - Confirm classification of deposits of nonresidents with SARB that are currently classified as denominated in national currency; if indexed to foreign currency they should be classified as denominated in foreign currency. - Specific accounts needing reclassification in 1SR (examples): - Utilization of Cash Reserves (DCR0904): reclassify from Miscellaneous Assets Items Residents, NC to Loans ODCs, NC. - Excess Cash Reserves (DCR0903): reclassify from Miscellaneous Liability Items Residents NC to Transferable Deposits Excluded from Broad Money, Included in Monetary Base, ODCs, NC. - Foreign Investments – Other (DCR0193): reclassify from Securities Included in Official Reserve Assets, FC to Other Deposits Nonresidents, Other, FC (excluded from official reserve assets). - Amounts Receivable – Finance Division (DCR0207): consult FSD to reclassify as trade credit and advances or miscellaneous asset/liability items. - Provision for loan losses in DCR0209: extract provision and classify in 1SR as Provisions for Loan Losses. - Four accounts (DCR0008, DCR0009, DCR0010, DCR0011): reclassify from Transferable Deposits, Included in Broad Money, Excluded from Monetary Base, NC to Transferable Deposits, Included in Broad Money, Included in Monetary Base, NC. - Gold and Forex Contingency Reserve (DCR0902A): investigate with FSD and reclassify properly (not Loans Central Government, NC). - Accrued Pay Leave Provision (DCR0114): reclassify from Provisions for Other Losses to Miscellaneous Liability Items Residents, NC. - Operational recommendations: - Reclassify deposit accounts in overdraft as loans via an “if” condition. - Separate provincial government deposits from central government deposits and classify them as deposits of state and local governments. - Review accounts grouped in series code DCK0001 and regroup into: central government, state and local government, public nonfinancial corporations, PFCs. - Use more granular deposit-account data in ACRs for the SARB once discrepancies with trial balance data are resolved. - Review and revise grouping of trial-balance accounts into time series clusters to ensure correct classification in 1SR. ### Public Entities (group DCK0001) and CPD reclassifications - Group DCK0001 is classified in 1SR as Other Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC but includes: - public nonfinancial enterprises, - provincial governments, - some PFCs. - Recommended actions: - Thoroughly review institutions in DCK0001. - Reclassify into four groups: central government, state and local governments, public nonfinancial corporations, PFCs. - Properly classify these groups in 1SR. - CPD Current Year Result: - Use CPD income statement accumulated from April 1 to reporting period end to populate Current Year Result. - Unrealized Profit and Loss – MM Instruments (DCK0179) needs reclassification from General and Special Reserves to Current Year Result. ### Coverage of Other Depository Corporations Sector (ODCS) — scope and missing components - Current ODCS scope: commercial and mutual banks, the Land Bank, and the Postbank, but not MMFs; this represents 95 percent of total assets of the sector. - Missing: 53 MMFs (unit trusts) whose accounts are aggregated with non-MMF investment funds and reported in the 4SR (OFCs). - Ithala SOC, a deposit-taking subsidiary of IDFC (included in OFCs), is not included in ODCS; separating it from its parent is difficult and may not be a priority given its small participation. ### Inclusion of MMFs in ODCS — rationale, mechanics, and communication - Rationale: MMF shares are highly liquid, low-risk, close substitutes for deposits; therefore they should be included in broad money and all MMFs classified as ODCs. - Mission actions: - Developed a bridge table mapping MM0046 source data to the 2SR and shared it with ESD. - For STA country reporting, holdings of MMF shares should be classified as Other Deposits, ODCs (close substitutes for deposits). - MMFs report quarterly to the SARB; balances need to be repeated for intervening periods. - Communication: - ESD should prepare a methodological note explaining the MMF reclassification and its impact on monetary aggregates. ### ODCS component data reporting issues and institution-specific notes - Commercial and mutual banks: - Report monthly to SARB within 15 working days after end of reporting month via BA 900 and DI 900 forms. - BA 900 matrix: rows by financial instrument and counterpart sector; columns by instrument characteristics (e.g., maturity). - Land Bank: - Reported data incomplete; assets and liabilities do not match; difference systematically over three percent of total assets. - ESD recently received more granular balance-sheet-based data; mission developed a bridge table for Land Bank to 2SR. - Postbank: - Reports only liabilities for deposits monthly; ESD obtained asset breakdown for August 2022 and will explore monthly provision or proportional allocation. - Ithala SOC: - Data embedded within parent group (OFCS); mission received exclusive Ithala SOC data and developed a bridge table to 2SR; inclusion in ODCS not a priority given small deposit share. - New bank report form: - ESD plans a new, very granular report form for banks enabling use for other macro statistics; expected implementation mid-2024. - Challenges expected in splicing current time series with new-report-form series. Recommendations for ODCS data - Include Ithala SOC accounts in ODCS, splitting them from IDFC (OFCS) from January 2023. - Introduce the more granular call report form for banks’ data submission to SARB. - Implement the mission-developed bridge table for Land Bank when granular balance-sheet data are consistently available. ### Mapping improvements to 2SR — classification actions and specific reclassifications - General observations: - Classification and sectorization largely follow international methodology but need improvements for full MFSMCG compliance. - Inclusion of MMFs in ODCS will turn bank–MMF positions into intra-sectoral positions within ODCs, with implications for broad money and claims on other sectors. - Specific mapping and classification actions: - Bank liabilities to MMFs (Money Market Unit Trusts) currently part of Transferable (or Other) Deposits Included in Broad Money OFCs, NC: reclassify as Transferable (or Other) Deposits Excluded from Broad Money ODCs, NC. - Banks’ claims on MMFs due to holdings of investment shares: - If bank-reported holdings unavailable, estimate from MMFs’ reported liabilities to banks. - In banks’ 2SR bridge table, add a line Holdings of MMF Shares within Other Deposits Excluded from Broad Money ODCs, NC and subtract same amount from Shares OFCs, NC. - Properly identify and classify instruments by currency of denomination; BA900 contains domestic/foreign breakdown but MBU largely classifies balances as national currency. - Redeemable preference shares: distinguish participating vs non-participating; reallocate between Securities Other than Shares and Shares and Other Equities as appropriate. - Loans with no counterpart information currently allocated to provincial governments: obtain descriptions to reclassify to appropriate sectors (corporate/household). - Specific 2SR bridge-table account reclassifications (examples): - Reclassify positions with provincial governments from central government to state and local governments; include provincial government deposits in broad money. - Other Assets: reclassify from Settlement Accounts ODCs, NC to Miscellaneous Asset Items, NC. - Remittances in Transit: reclassify to Items in the Process of Collection (Residents and Nonresidents), NC. - Debt securities other than negotiable certificates of deposit: reclassify from Securities Other than Shares Excluded from Broad Money to Securities Other than Shares Included in Broad Money. - Delete two contra-entries labeled Other Assets in Settlement Accounts ODCs, NC and Settlement Accounts Other Nonfinancial Corporations, NC. - Credit in Transit: reclassify to Miscellaneous Liability Items, NC. - Other Reserves: reclassify from Retained Earnings to General and Special Reserves within Shares and Other Equity; identify Current Year Result separately. - Additional 2SR compilation improvements: - Review currency denomination of financial instruments reported by banks. - Allocate preference shares between debt and equity based on bank information. - Obtain additional information on loans with no counterpart information to ensure correct classification. - Implement all mission-recommended account reclassifications for commercial and mutual banks. Recommendation: - Compile the 2SR (ODCs’ data) incorporating the recommended reclassifications in the updated bridge table prepared by the mission and report 2SR to STA with revisions in historical data starting from December 2018 onwards. ### OFC sector reporting, CMFFU system, and IMD uptake - CMFFU reporting system: - In Q3 2020 CMFFU introduced a new web-based reporting system replacing manual Excel and PDF reporting; forms tailored to each OFC sub-sector with built-in validation and rejection rules. - Transmitted data contain instrument-level and counterpart-sector detail sufficient for mapping into bridge tables that generate the 4SR. - Coverage and gaps: - Around 1,400 active private PFs exist; only 634 report to the SARB, representing 80 percent of total assets of this sub-group. - The OFCS contains accounts of MMFs included as part of unit trusts which should be reclassified to the ODCs sector. - More than 90 percent of PIC’s liabilities are to official PFs. - Reporting frequency and timeliness: - OFC institutions report quarterly, generally within four weeks after period end; PFs report via C48 within eight weeks; ICs via C68 within four weeks. - To avoid double counting the GEPF’s assets managed by the PIC, CMFFU excludes the GEPF’s assets from the source data of official PFs in the 4SR. - Mapping and technical assistance: - The mission did not review mapping from OFC data sources to the 4SR; a follow-up mission will undertake this review if requested by SARB. - Use of SRFs, bridge tables, and IMD: - ESD is still using bridge tables developed by the 2004 MFS TA mission; the mission updated SRFs and bridge tables and left ESD a complete file with SRFs and analytical surveys that are automatically populated once SRFs are filled. - STA’s IMD automatically generates analytical presentations from SRFs and can be adapted to produce statistics for national monetary policy and dissemination; SRFs can populate around 70 percent of the information needed for the balance sheet approach matrix. - Historical revisions and consistency: - The mission recommended revising historical series from December 2018 onwards to maintain time series consistency between old and new methodologies. - ESD agreed on the need to revise historical series but expressed concern due to technical and human resources constraints. - Recommendation: SARB to evaluate using STA’s IMD as the source for its national statistics to increase consistency between national dissemination and IMF reporting. *IMF | Technical Assistance Report – South Africa Monetary and Financial Statistics* ### Executive Summary _________________________________________________________________________________ 3 ### Executive Summary ### Mission scope and objectives - A remote monetary and financial statistics (MFS) technical assistance (TA) mission took place during August 10–23, 2022, at the request of the South African Reserve Bank (SARB) with support from the IMF’s African Department (AFR). - Objective: assist the SARB in ensuring South Africa’s monetary data are compiled in compliance with the 2016 Monetary and Financial Statistics Manual and Compilation Guide (MFSMCG), including full coverage of the other depository corporations (ODCs) sector, using the standardized report forms (SRFs) developed by the IMF’s Statistics Department (STA). ### Key findings on compliance and data mapping - Once the mission’s recommendations are implemented, both the central bank survey (CBS) and the ODCs survey (ODCS) will fully comply with the methodology of the MFSMCG. - The mission thoroughly reviewed the bridge tables generating SRFs for the central bank (1SR) and ODCs (2SR) and detected shortcomings in the mapping from source data to 1SR and 2SR regarding classification and sectorization of financial instruments. - Particular attention was given to the recording and reporting of the IMF accounts within the central bank data (1SR). ### Bridge tables, reclassifications, and monetary aggregates - The mission developed bridge tables from source data of: - money market funds (MMFs), - the Land Bank, - Ithala SOC, to map to 2SR. - MMFs are currently included with non-MMF investment funds in the other financial corporations (OFC) sector; once reclassified to the ODCs sector and mapped via the mission’s bridge table, this will affect the calculation of broad money. - The bridge table for the Land Bank, based on its more detailed balance sheet, will replace the one currently used by the Money and Banking Unit (MBU) when available. - Ithala SOC is a deposit-taking subsidiary of the Ithala Development Finance Corporation (IDFC); its accounts are currently merged within the group balance sheet. Once separable, they will be added to 2SR using the mission’s bridge table. - The mission estimated that reclassifying the MMFs from the OFCs to the ODCs sector will increase broad money by two to three percent. - Recommendation: the Economic Statistics Department (ESD) should prepare a methodological note explaining the reclassification of MMFs and its impact on monetary aggregates. ### Financial system structure and size (selected statistics) - Total assets of the financial corporations’ sector, excluding the SARB, at end-March 2022, were above 21,000 billion rands (ZAR), approximately US $1,400 billion or 3.3 times the size of the country’s GDP. - The SARB performs typical central bank functions and includes one financial subsidiary (Corporation for Public Deposits, CPD) whose accounts are consolidated with the SARB for the CBS. - The ODCs sector is dominated by commercial banks constituting 95 percent of its total assets. - Fifty-three MMFs (known in South Africa as unit trusts) raise funds from the public and constitute 5 percent of the ODC sector’s total assets. - Total assets of OFCs are almost twice those of ODCs; major players include insurance corporations and pension funds. Non-MMF investment funds number 1,653 with assets of ZAR 3,200 billion. ### Priority recommendations and targets (selected items) - Compile 1SR (central bank’s data) incorporating the recommended reclassifications in the updated bridge table prepared by the mission and report it to STA with revisions in historical data starting from December 2018 onwards. — Target: April 2023. — Responsible: ESD. - Compile 2SR (ODCs’ data) incorporating the recommended reclassifications in the updated bridge table prepared by the mission and report it to STA with revisions in historical data starting from December 2018 onwards. — Target: April 2023. — Responsible: ESD. - Expand the coverage of the ODCS, reclassifying the accounts of MMFs from the OFCs (4SR) to the ODCs (2SR) subsector using the bridge table developed by the mission for data reporting to STA. — Target: May 2023. — Responsible: ESD. - Improve the recording of the IMF accounts in 1SR including revising historical data from December 2018 as recommended by the mission. — Target: April 2023. - Eliminate all manual adjustments currently performed when compiling bridge tables for 1SR; if accounts with negative balances need reclassification, implement through built-in “if” conditions. — Target: April 2023. - Introduce a more granular call report form for the submission of banks’ data to the SARB. — Target: June 2024. - Include in the ODCS the accounts of Ithala SOC, splitting them from IDFC (classified as OFCs) from January 2023. — Target: June 2023. - The ESD to prepare a methodological note explaining the reclassification of MMFs to the ODC sector and its impact on monetary aggregates. — Target: April 2023. - The SARB to evaluate the option of increasing consistency between monetary statistics disseminated nationally and those disseminated through the IMF by using STA’s Integrated Monetary Database (IMD) as the source for national statistics. — Target: June 2024. ### Operational notes on source data and compilation - The central bank comprises two institutional units (the SARB and the CPD); the MBU produces a bridge table for each institution from their trial balances and consolidates partial SRFs into one 1SR. - Similar trial balance accounts are clustered into groups and mapped to the bridge table; the internal system (ERP-RMT) groups accounts under time series codes for mapping to the bridge table that generates 1SR. - New accounts are classified using a “nearest neighbor” algorithm; when uncertain, the MBU consults the Financial Services Department (FSD) accounting team. This manual allocation occurs whenever new accounts are added. *IMF | Technical Assistance Report – South Africa Monetary and Financial Statistics, Executive Summary* ### 17. More granular information is added from additional sources. Because the trial balance does ### 1zafea2023003 - 17. More granular information is added from additional sources. Because the trial balance does ### More granular information from Account Class Reports (ACRs) - The trial balance lacks sub-account level detail (e.g., individual correspondent banks); the MBU obtains disaggregated sub-account balances from Account Class Reports (ACRs). - Use of ACRs: - SARB: ACRs are used basically as a control tool and not as a source for more granular data. - CPD: ACRs are used at the sub-account level to populate the source file for the bridge table. - The mission detected systematic discrepancies between SARB’s trial balance account balances and the aggregation of sub-accounts in the ACRs, which in principle should not exist, and which are fixed manually during the same month or the next. - The MBU is investigating with the FSD the reasons for these discrepancies, which has occurred since September 2021. A possible explanation is a system upgrade that produced timing differences that cannot be backdated. - If the discrepancies between the SARB’s ACRs and the corresponding accounts in the trial balance are fixed, the MBU should use the ACRs’ more granular data when producing the bridge table for the SARB. ### Grouping of accounts and overdraft treatment - Grouping accounts that record the same financial instrument and counterpart sector simplifies mapping and eliminates multiple entries for the same category in 1SR, but: - Some groups contain accounts that do not belong there. - Risk: deposit accounts in overdraft might net against deposits of other institutional units instead of being classified as loans. - Current practice: - Some accounts in overdraft are correctly classified as loans (e.g., deposits of provincial governments), but this reclassification is done manually by the MBU due to IT system constraints rather than through built-in automatic validations. - Recommendations (detailed below in other sections): - Use ACRs for individual deposit accounts to identify overdrafts. - Automate reclassification of negative balances via an “if” condition in the bridge table. ### IMF accounts — recording, reporting, and specific misclassifications Findings: - SARB is fiscal agent and depository institution for the NT’s relations with the IMF; transactions are recorded by both NT and SARB and sometimes duplicated. - Two risks: - (i) Risk of duplication of foreign assets or liabilities between NT financial statements and SARB data reported to the International Reserves Data Template. - (ii) When compiling the CBS, STA substitutes central bank reported data with IMF Finance Department (FIN) records; in South Africa only the positions kept in the SARB’s books should be replaced by FIN records, not those recorded in NT accounts. - SDR Holdings: - NT has deposited its holdings of SDRs with the SARB. SARB reports them in 1SR as Holdings of SDRs and includes them in international reserves on its website. - NT presents SDR holdings as foreign assets with a note that they are held by the SARB. The position is not double counted in the International Reserves Data Template. - SARB created a matching liability to NT for SDR holdings in account 5003 Treasury SDR Deposit Account. - In 1SR account 5003 is classified as Transferable Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC. - The account is revalued monthly to reflect the R/SDR exchange rate and to match asset account 14101 SDR. - Although denominated in national currency for accounting, when mapping to 1SR it should be classified as denominated in foreign currency because its balance is indexed to a foreign currency. - SDR Allocations: - Liability for SDR allocations was assumed by the NT and presented in its financial statements as a foreign liability. - The SARB was reporting SDR Allocations in 1SR but eliminated it starting in April 2022 and transferred the balance to Transferable Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC. - The revision should be made for the whole historical series. - NT reported end-March 2021 amount equivalent to SDR 2,623.2 million, while FIN’s records indicate cumulative allocations for SDR 1,785.4 million. - Reserve Tranche Position in the IMF (RTP): - RTP is recorded in SARB balance sheet using accounts 15107 IMF SDR FTP and 15108 IMF SDR Quota; split reasons relate to subscription timing but combining would add clarity. - Aggregated balances of 15107 and 15108 match FIN’s records for RTP. - Misclassifications in 1SR: - Account 15107 is part of time series code DCR0193 and classified as Securities Included in Official Reserve Assets, FC (incorrect). - Account 15108 has time series code DCR0172 and is classified in 1SR, together with account 14101, as Holdings of SDRs (incorrect). - Both should be separated from current time series codes and classified in 1SR as Other Deposits Included in Official Reserve Assets, FC – Reserve Position in the IMF. - Double counting note: double counting of account 15107 in the CBS increases SARB’s net foreign assets by ZAR 7.7 billion, or 0.8 percent. - Deposits recording SARB’s liability to NT for RTP: - Accounts 5006 IMF RTP Deposits and 5007 NT IMF SDR Quota record liability. - Account 5007 currently classified in 1SR as Transferable Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC as part of Treasury SDR Deposit Accounts, but should be reclassified as denominated in foreign currency (indexed to foreign currency). - Account 5006 is missing from the bridge table and should be mapped to it; it should also be classified as Transferable Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC. - ESD wants to identify separately the accounts related to the RPF in the 1SR bridge table. - Lending to the IMF: - SARB has a claim on the IMF for a loan under the New Agreement to Borrow in account 15106 IMF – NAB FTP Account. - Account 15106 is misclassified in 1SR as Securities Included in Official Reserve Assets, FC and needs reclassification to Loans Nonresidents, FC – Loans to IMF. - IMF Quota and IMF Securities Account: - NT reports the country’s IMF quota as foreign assets and the IMF Securities Account as foreign liabilities. - Part of the IMF Securities Account liability (amount equivalent to the quota) is due to Rapid Financing Instrument funds disbursed directly to the NT; this disbursement is not recorded by SARB (which is correct). - The portion of the quota subscribed in national currency is part of foreign liabilities reported by NT; difference between IMF Quota and IMF’s holdings of national currency (IMF No. 1 and Securities Accounts) not related to use of IMF resources constitute the country’s RTP in the IMF. - Since RTP is recorded and reported by SARB, NT reporting the IMF Quota as a foreign asset, partly compensated with IMF Securities Account liability, implies double counting of the country’s external assets. - IMF No. 1 and No. 2 Accounts: - IMF No. 1 Account is used by SARB to record yearly revaluations per FIN instructions; its balance is around two percent of the country’s quota in the IMF. - Currently IMF No. 1 is included by the MBU in account 2301 SARB Other Customers GL Roll-up Account (DCR0020) and classified in 1SR as Transferable Deposits Excluded from Monetary Base Nonresidents, NC. It should be separated and reclassified as IMF Accounts No. 1 and Securities, NC. - IMF No. 2 Account is also rolled up in 2301; used for IMF administrative transactions with normally a small outstanding balance. It should be separated and reclassified in 1SR as IMF Account No. 2. - Income and expense accounts related to the IMF: - Accounts 5002 Treasury SDR Revenue Account, 23301 Treasury SRD Expense Account, and 31204 Interest Received – IMF NAB FTP are misclassified in 1SR as asset or liability accounts. - Current classifications: first two as Settlement Accounts Central Government, NC (liability/assets); last as Securities Included in Official Reserve Assets, FC. - All should be reclassified to Current Year Result within Shares and Other Equity. - Overall: mission reclassified many IMF-related accounts in the bridge table for -1SR and notes time series should be revised backwards correspondingly. Recommendations (IMF accounts) - Improve the recording of the IMF accounts in the 1SR including revising historical data from December 2018. - Coordinate with the NT on the dissemination of data related to the country’s transactions with the IMF. ### Accounts in overdraft — identification and automation Findings: - Clustering individual accounts risks misclassifying deposit accounts in overdraft; overdrafts should be classified as loans, not netted against other account holders. - Aggregation into a single group prevents detection of overdraft accounts. Recommendations: - Use ACRs for individual deposit accounts instead of grouping them in one time series code, once master account balances in SARB’s trial balance consistently match aggregation of sub-accounts in ACRs. - Automate reclassification: create an “if” condition in the bridge table so that deposits with negative balances (assets or liabilities) are reclassified as loans to the other side of the balance sheet. ### Provincial government deposits Findings and guidance: - Provincial government deposits with the CPD are classified in 1SR as central government deposits excluded from broad money and monetary base. - MFSMCG (paragraph 6.73) recommends considering provincial governments as a money-holding sector because their behavior is closer to other money-holding sectors than to central government for monetary policy purposes. - STA Government Finance Division staff indicated provincial and local governments have own revenues and wide spending discretion, closer to a money-holding sector. - ESD considers provincial governments largely funded through national grants/transfers and therefore their deposits should be excluded from broad money. Mission position: - Independently of inclusion/exclusion from broad money, provincial government deposits should not be presented as part of central government’s deposits. Recommendation: - Reclassify all provincial government deposits in 1SR from Deposits Central Government to Deposits State and Local Governments. - The mission opines these deposits should be included in the national definition of broad money. ### Manual adjustments and need to eliminate them Findings: - Manual adjustments are performed in bridge tables to eliminate mapping differences: - MBU introduces Control Accounts on asset (DCR0208) and liability (DCR1212) sides for SARB, and balancing items for CPD. - These manual adjustments represent between half and one percent of total assets for SARB and are negligible for CPD. - Differences likely originate in unmapped accounts, duplications, etc., not vertical checks in source trial balances. - Manual adjustments are also used to reclassify accounts with negative balances by moving them to the other side of the balance sheet to avoid negative entries. Recommendations: - Eliminate all manual adjustments currently performed when compiling the bridge tables for 1SR. - If accounts with negative balances need reclassification, implement it through a built-in “if” condition in the bridge table rather than manual intervention. - If vertical checks reveal differences in bridge table compilation, investigate and solve root causes rather than erase differences. ### Data issues in 1SR — mapping shortcomings and SARB-specific items Overall finding: - Several shortcomings in mapping from source data to bridge table 1SR need addressing; some have significant CBS impact, others are minor or fall within Other Items Net. SARB-specific findings and reclassification needs: - Review account grouping in ACRs to ensure MFSMCG methodology consistency: - E.g., SSOCA contains mostly nonresident banks but also IMF Accounts No. 1 and No. 2, SARB Retirement Fund, and a CPD account; MBU must verify SCBLA and SSBRA banks are truly nonresident institutions (e.g., SIRESS Loan Account and Reserve Account in SAMOS). - Income and expense accounts mapped to Current Year Result in bridge table should be consolidated into one or two entries: - Use accumulated income from the beginning of the fiscal year (source: SARB’s Income Statement) rather than mapping a long list of income/expense accounts. - ESD should enquire with FSD about reasons for discrepancies between income/expenditure and trial balance accounts and simplify Current Year Result calculation. - Confirm classification of deposits of nonresidents with SARB that are currently classified as denominated in national currency; if indexed to foreign currency they should be classified as denominated in foreign currency. Specific accounts needing reclassification in bridge table 1SR: - Utilization of Cash Reserves (DCR0904): - Reclassify from Miscellaneous Assets Items Residents, NC to Loans ODCs, NC. - Excess Cash Reserves (DCR0903): - Reclassify from Miscellaneous Liability Items Residents NC to Transferable Deposits Excluded from Broad Money, Included in Monetary Base, ODCs, NC. - Foreign Investments – Other (DCR0193): - Currently classified in 1SR as Securities Included in Official Reserve Assets, FC but contains numerous margin accounts for futures (zero or very small balances); reclassify as Other Deposits Nonresidents, Other, FC (excluded from official reserve assets). - Amounts Receivable – Finance Division (DCR0207): - Currently classified as Loans to OFCs, NC but contains trade credit and advances to resident sectors (e.g., sundry debtors) and miscellaneous assets (e.g., staff loan advances); ESD should consult FSD to reclassify as trade credit and advances or miscellaneous asset/liability items and produce a list for STA review. - Provision for loan losses included in DCR0209 (Amounts Receivable – Housing): - Extract provision from the group and classify in 1SR as Provisions for Loan Losses (balance is zero). - Four accounts (DCR0008, DCR0009, DCR0010, DCR0011): - Currently classified as Transferable Deposits, Included in Broad Money, Excluded from Monetary Base, NC (zero or very small balances); reclassify to Transferable Deposits, Included in Broad Money, Included in Monetary Base, NC. - Gold and Forex Contingency Reserve (DCR0902A): - Apparently records revaluation gains in gold and foreign currency that eventually need to be transferred to the NT. - Currently classified as Loans Central Government, NC which is incorrect. - MBU needs to investigate with FSD to classify properly as Trade Credit and Advances Central Government or as Miscellaneous Liability Items. - Accrued Pay Leave Provision (DCR0114): - Reclassify from Provisions for Other Losses to Miscellaneous Liability Items Residents, NC. *Source: IMF Technical Assistance Report – South Africa Monetary and Financial Statistics (extract).* ### 44. The group Public Entities, classified as being part of central government, contains many ### 1zafea2023003 - 44. The group Public Entities, classified as being part of central government, contains many ### Public Entities (group DCK0001) — classification issues and required reclassifications - The group DCK0001 is classified in 1SR as Other Deposits Excluded from Broad Money, Excluded from Monetary Base, Central Government, NC. - A mission check showed many DCK0001 accounts are: - public nonfinancial enterprises, - provincial governments, - some PFCs. - Recommended actions for the MBU: - Thoroughly review the list of institutions included in DCK0001. - Reclassify them into four groups: central government, state and local governments, public nonfinancial corporations, PFCs. - Properly classify these groups in 1SR. ### CPD Current Year Result and related reclassification - For the CPD’s current year result, the MBU may use figures from the income statement instead of listing individual income and expense accounts. - Balances in the CPD’s income statement match the sum of accounts in 1SR under Current Year Result with one caveat: - Unrealized Profit and Loss – MM Instruments (DCK0179) needs to be reclassified from General and Special Reserves to Current Year Result. - Suggested operational step: - Request from FSD income statements that accumulate flows from the beginning of the fiscal year (April 1) to the end of the reporting period. ### Specific 1SR bridge-table account reclassifications - Interest Accrued - STB (DCK0208): reclassify from Securities Central Government, NC to Other Deposits, ODCs, NC. - Six accounts (DCK0118, DCK0125, DCK0075, DCK0078, DCK1140, DCK0027) currently classified as Transferable Deposits, Included in Broad Money, Excluded from Monetary Base, NC (zero or very small balances): reclassify to Transferable Deposits, Included in Broad Money, Included in Monetary Base, NC. - Rename DCK0002 from Deposits of Provincial Governments to Deposits Central Government (accounts are of central government entities, e.g., museums). - Confirm whether nontransferable deposits of foreign banks with the CPD (DCK015) are effectively in national currency, and not in foreign currency or indexed to a foreign currency. - Sundry Creditors (DCK0167): reclassify from Settlement Accounts State and Local Government, NC to Trade Credit and Advances Other Nonfinancial Corporations, NC. - Special Account (DCK0168): reclassify from Miscellaneous Liability Items Residents, NC to Other Accounts Payable, Provisions for Loan Losses. ### Improvements in the 1SR compilation process (recommended) - Reclassify deposit accounts in overdraft as loans to avoid netting with positive deposit balances; introduce an “if” condition in the bridge table to automate this. - Separate provincial government deposits from central government deposits and classify them as deposits of state and local governments; include them in the national definition of broad money. - MBU to review accounts grouped in series code DCK0001 and regroup into: central government, state and local government, public nonfinancial corporations, PFCs. - Use more granular deposit-account data in ACRs for the SARB once discrepancies with trial balance data are resolved. - Review and revise grouping of trial-balance accounts into time series clusters to ensure correct classification in 1SR. Recommendation: - Compile 1SR (central bank’s data) incorporating the above reclassifications and improvements in the updated bridge table prepared by the mission and report 1SR to STA with revisions in historical data starting from December 2018 onwards. --- ### Coverage of Other Depository Corporations Sector (ODCS) - Current ODCS scope: commercial and mutual banks, the Land Bank, and the Postbank, but not MMFs; this represents 95 percent of total assets of the sector. - Missing from coverage: 53 MMFs (unit trusts), whose accounts are aggregated with non-MMF investment funds and reported in the 4SR (part of OFCS). - Ithala SOC, a deposit-taking subsidiary of IDFC (included in OFCS), is not included in ODCS; separating it from its parent is difficult and may not be a priority given its small participation. ### Inclusion of MMFs in the ODCS — rationale and mechanics - MMFs should be included in ODCS because MMF shares are highly liquid, low-risk, close substitutes for deposits; therefore they should be included in broad money and all MMFs classified as ODCs. - The 2004 MFS TA mission previously recommended expanding ODCS to include MMFs. - MMFs report to the SARB with sufficient disaggregation to allow classification and sectorization in 2SR. - The mission developed a bridge table mapping MM0046 source data to the 2SR and shared it with ESD. - For STA country reporting, lacking new MFSMCG-recommended s for MMFs, holdings of MMF shares should be classified as Other Deposits, ODCs (close substitutes for deposits). - MMFs report quarterly to the SARB; balances need to be repeated for intervening periods. ### Impact of reclassifying MMFs from OFC to ODCs - Inclusion effects on monetary aggregates and sectoral claims: - Deposits of MMFs with commercial banks will be excluded from broad money, reducing broad money. - Claims of commercial banks on MMFs (holding of MMF shares) will be consolidated in Other Items Net, instead of being reported as claims on OFCs. - Holdings of MMF shares by money-holding sectors (e.g., households) will be classified as Other Deposits Included in Broad Money, increasing broad money (currently classified as Funds Contributed by Owners in OFCS). - Quantified impact: - Including MMFs in ODCs will increase broad money between 2 and 3 percent. - At end-2021, broad money in South Africa was ZAR 4,353 billion. - Claims of MMFs on ODCs included in broad money (deposits and debt securities) were ZAR 312 billion. - Liabilities of MMFs that should be included in broad money were ZAR 415 billion. - Subtracting intersectoral positions and adding MMFs’ liabilities to money-holding sectors result in a revised broad money of ZAR 4,456 billion. - Communication: - Methodological notes should explain revisions and impacts when SARB reclassifies MMFs from OFCs to ODCs. Recommendations: - Expand coverage of ODCs by reclassifying MMFs accounts from OFCs (4SR) to ODCs (2SR) using the mission’s bridge table for data reporting to STA. - ESD to prepare a methodological note explaining the MMF reclassification and its impact on monetary aggregates. --- ### Data reporting and source-data issues for ODCS components - Commercial and mutual banks: - Report monthly to SARB within 15 working days after end of reporting month. - Relevant forms: BA 900 and DI 900. - BA 900 matrix structure: rows by financial instrument and counterpart sector; columns by instrument characteristics (e.g., maturity). - MBU organizes BA 900 matrix on a spreadsheet for mapping to 2SR bridge table. - Land Bank: - Reported data incomplete; assets and liabilities do not match; difference systematically over three percent of total assets. - ESD recently received more granular balance-sheet-based data (financial instruments and counterpart sectors, including maturity). - Mission developed a bridge table for Land Bank to 2SR to replace the currently used one. - Transmission of granular data was affected by Land Bank liquidity difficulties and covid disruptions; MBU to resume discussions to implement new granular template. - Postbank: - Reports only liabilities for deposits (monthly); liabilities allocated to household sector. - Asset counterpart currently classified in 2SR as Securities ODCs, NC, which is not correct. - ESD obtained Postbank asset breakdown for August 2022; will explore monthly provision of this data or use latest data to proportionally allocate total assets in 2SR. - Ithala SOC: - Data embedded within parent group (included in OFCs); mission received exclusive Ithala SOC data and developed a bridge table to 2SR. - Splitting Ithala SOC from IDFC accounts is cumbersome; inclusion in ODCS not a priority given small deposit share. - New bank report form: - ESD plans a new, very granular report form for banks, enabling use for other macro statistics (sectoral accounts, balance of payments). - Expected implementation set by mid-2024. - Challenges expected in splicing current time series with new-report-form series. Recommendations: - Include Ithala SOC accounts in ODCS, splitting them from IDFC (OFCS) from January 2023. - Introduce the more granular call report form for banks’ data submission to SARB. --- ### Improvements in mapping source data to 2SR and specific reclassifications - General observations: - Classification and sectorization largely follow international methodology but need improvements for full MFSMCG compliance. - Inclusion of MMFs in ODCS will turn bank–MMF positions into intra-sectoral positions within ODCs, with implications for broad money and claims on other sectors. - Specific mapping and classification actions: - Bank liabilities to MMFs (Money Market Unit Trusts), currently part of Transferable (or Other) Deposits Included in Broad Money OFCs, NC: reclassify as Transferable (or Other) Deposits Excluded from Broad Money ODCs, NC. - Banks’ claims on MMFs due to holdings of investment shares: - No separate information currently reported by banks; currently classified as Shares OFCs, NC. - If bank-reported holdings unavailable, estimate from MMFs’ reported liabilities to banks. - In banks’ 2SR bridge table, add a line Holdings of MMF Shares within Other Deposits Excluded from Broad Money ODCs, NC populated with the figure reported by MMFs as liabilities to banks; subtract same amount from Shares OFCs, NC (properly identified). - Properly identify and classify instruments by currency of denomination: - BA900 contains domestic/foreign breakdown and which items are in foreign currency, but MBU largely classifies balances as national currency. - Example inconsistencies: holdings of securities or shares issued by nonresidents classified in national currency. - Redeemable preference shares: - Current reporting does not distinguish participating vs non-participating preference shares. - Currently all redeemable preference shares classified as Securities Other than Shares, NC distributed by issuing sector; some likely should be reclassified as Shares and Other Equities, NC. - ESD to consult banks to allocate between debt (non-participating preference shares) and equity (participating). - Loans with no counterpart information: - Currently allocated by default as claims on provincial governments (Loans to State and Local Governments, NC). - Descriptions (e.g., farm mortgages, residential advances) suggest misclassification; need confirmation and potential reallocation to corporate/household sectors. - Specific 2SR bridge-table account reclassifications - All positions (assets and liabilities) with provincial governments: reclassify from central government to state and local governments. For provincial government deposits, mission recommends including them in broad money. - Confirm whether Mortgage Advances to nonresidents are loans to nonresidents and reclassify if needed. - Other Assets: reclassify from Settlement Accounts ODCs, NC to Miscellaneous Asset Items, NC. - Remittances in Transit: reclassify from Settlement Accounts (Other Resident Sectors and Nonresidents), NC to Items in the Process of Collection (Residents and Nonresidents), NC. - Confirm Retirement Benefit Assets are not claims on PEs (Trade Credit/Advances, OFCs) and are correctly classified as Miscellaneous Asset Items Residents, NC. - Investigate Current Income Tax Receivables and Deferred Income Tax Assets (currently Miscellaneous Asset Items Nonresidents, NC) because resident banks having tax claims on a nonresident government in national currency is unusual. - Debt securities other than negotiable certificates of deposit (already included in broad money): reclassify from Securities Other than Shares Excluded from Broad Money to Securities Other than Shares Included in Broad Money. - Confirm nature of Liabilities to SA Banks (currently Trade Credit/Advances ODCs, NC) for proper classification. - Other Liabilities to Domestic Sectors: reclassify from Settlement Accounts ODCs, NC to Miscellaneous liability items, NC. - On liability side: delete two contra-entries labeled Other Assets in Settlement Accounts ODCs, NC and Settlement Accounts Other Nonfinancial Corporations, NC. - Credit in Transit: reclassify from Settlement Accounts Other Resident Sector, NC to Miscellaneous Liability Items, NC. - Other Reserves: reclassify from Retained Earnings to General and Special Reserves within Shares and Other Equity. Current Year Result appears reported as part of Other Reserves and should be identified separately. ### Additional 2SR compilation process improvements (recommended) - MBU to thoroughly review currency denomination of financial instruments reported by banks for correct 2SR classification. - MBU to allocate preference shares between Securities Other than Shares and Shares and Other Equity based on additional bank information. - MBU to obtain additional information on loans with no counterpart information (currently allocated to provincial governments) to ensure correct 2SR classification. - Implement all mission-recommended account reclassifications for commercial and mutual banks. Recommendation: - Compile the 2SR (ODCs’ data) incorporating the recommended reclassifications in the updated bridge table prepared by the mission and report 2SR to STA with revisions in historical data starting from December 2018 onwards. *Source: IMF Technical Assistance Report – South Africa Monetary and Financial Statistics (excerpts, paragraphs 44–64).* ### 65. Within the ESD, the Capital Market and Flow of Funds Unit (CMFFU) is responsible for the ### Within the ESD, the Capital Market and Flow of Funds Unit (CMFFU) is responsible for the ### Reporting system and data collection - In Q3 2020 the CMFFU introduced a new web-based reporting system to replace manual Excel and PDF reporting; the new report forms are tailored to each sub-sector of the OFC sector and include built-in validation and rejection rules. - The transmitted data contain instrument-level and counterpart-sector detail sufficient for straightforward mapping into the bridge tables that generate the 4SR. ### Coverage and data gaps - Around 1,400 active private PFs exist; only 634 report their accounts to the SARB, representing 80 percent of total assets of this sub-group. - The OFCS contains accounts of MMFs included as part of data reported by unit trusts which should be reclassified to the ODCs sector. - More than 90 percent of PIC’s liabilities are to official PFs. ### Reporting frequency and timeliness by institution - All institutions of the OFCs sector report quarterly data, generally within four weeks after the end of the reporting period. - ICs: balance sheets and income statements (C68 form) with a timeliness of four weeks. - PFs: C48 form, quarterly frequency within eight weeks after the end of the reporting period; the five official PFs for public sector employees (including the GEPF) regularly report to the SARB. - To avoid double counting the GEPF’s assets managed by the PIC, the CMFU excludes the GEPF’s assets from the source data of official PFs in the 4SR. - Non-MMF investment funds: C23 form, reported within four weeks after the end of the reporting period. - Finance companies: C32 form, quarterly with timeliness of four weeks. - Two participation bond schemes: C11 form, quarterly within four weeks after the end of the reporting period. - Six PFCs report with a lag longer than one month. ### Mapping, review, and technical assistance - The mission did not review the mapping from different data sources to the 4SR; this review will be undertaken as part of a follow-up mission. - The mission concentrated on central bank and ODC accounts; analysis of the OFC sector was beyond its scope. - If the SARB requests it, STA might provide additional TA to address OFC mapping and related issues. ### Use of SRFs, bridge tables, and the Integrated Monetary Database (IMD) - The ESD is still using bridge tables developed by the 2004 MFS TA mission. - The mission developed and shared SRFs and the latest analytical surveys for the central bank, ODCs, and OFCs, and updated bridge tables mapping source data of institutional units to sectoral balance sheets (e.g., SARB’s and CPD’s trial balances to 1SR). - The mission left ESD a complete file with SRFs and analytical surveys which are automatically populated once SRFs are filled. - STA’s IMD: - Automatically generates analytical presentations of central bank, ODC, depository corporation, OFC, and financial corporation surveys from SRFs. - Can be adapted to produce statistics for national monetary policy and dissemination. - Information in SRFs can populate around 70 percent of the information needed for the balance sheet approach matrix. ### Historical revisions and consistency - The mission recommended revising historical series from December 2018 onwards to maintain time series consistency between old and new methodologies. - The ESD agreed on the need to revise historical series but expressed concern due to technical and human resources constraints. - Recommendation: - The SARB to evaluate the option of increasing the consistency between the monetary statistics disseminated nationally and those disseminated through the IMF by using STA’s IMD as the source for its national statistics. *IMF | Technical Assistance Report – South Africa Monetary and Financial Statistics* --- _Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1zafea2023003.pdf_