South African Reserve Bank (Sarb) governor Lesetja Kganyago says while South Africas placement on the Financial Action Task Force (FATF) greylist did not immediately impact correspondence between local banks and foreign institutions, the need to exit the list remains urgent for the economy.
Kganyago was addressing the bank's 104th AGM in Pretoria on Tuesday. The FATF placed South Africa on its greylist last year, citing weaknesses in the countrys safeguards against money laundering and terror financing.
He said risks to the economic outlook included geopolitical tensions, sticky inflation, elevated government debt levels globally and unprecedented elections around the world throughout the year, leading to uncertainty and market volatility.
South Africa is confronted with its governments growing debt levels and ever-higher debt servicing costs as well as domestic financial institutions high exposure to the debt. The Sarb continues to monitor this sovereign financial sector nexus closely.
He said the FATF greylisting increased requirements on financial institutions and other institutions, referred to as Designated Non-Financial Businesses and Professions or DNFBPs, to account for their internal controls aimed at ensuring they do not facilitate the flow of funds from money laundering or for terror financing.
