The South African Reserve Bank has published a staff economic note concluding that de-dollarisation would neither resolve macroeconomic instability nor provide emerging markets with a straightforward route to greater policy autonomy. Financial integration generally supports growth and policy space, while the US dollar’s deep markets, institutional foundations and network effects limit the viability of near-term alternatives. Geoeconomic fragmentation could shrink access to global capital, raise risk premiums and increase refinancing risks as flows become more influenced by political alignment. For South Africa, low foreign currency public debt and limited dollar deposits reduce currency mismatch risks, but external liabilities remain concentrated among US and Western European investors. The note identifies the country’s main constraint as its weak capacity to convert capital into productivity and potential growth, making fiscal discipline, investment conditions and a credible macroeconomic policy mix more consequential than the currency denomination of liabilities.
2026-09-08South African Reserve Bank
South African Reserve Bank note finds de-dollarisation will not increase emerging-market policy autonomy
A South African Reserve Bank staff note concludes that de-dollarisation will not resolve macroeconomic instability or increase emerging-market policy autonomy. For South Africa, the central challenge is converting capital into productivity and potential growth, while fragmentation could reduce financing access and raise risk premiums.