½ Penny – South Africa

In 1928, South Africa's currency situation was defined by its recent transition to the Sterling Exchange Standard and the establishment of the South African Reserve Bank (SARB) in 1921. Prior to this, the monetary system was fragmented, with commercial banks issuing their own notes. The SARB's creation centralised note issue and formally pegged the South African pound at par with the British pound sterling, ensuring full convertibility. This arrangement firmly integrated South Africa into the British imperial financial system, facilitating trade and capital flows, but also made the domestic economy highly dependent on British monetary policy and gold market dynamics.

The system's stability was fundamentally underpinned by the country's vast gold reserves. As the world's leading gold producer, South Africa's currency credibility and its ability to maintain the sterling peg were directly backed by gold exports. Government revenue and the balance of payments were heavily reliant on this single commodity. Consequently, the value and management of the currency were inextricably linked to the international gold price and the health of the mining sector, which dominated the economy.

This period, just before the Great Depression and the 1931 British abandonment of the gold standard, represented a point of apparent stability. The currency was secure and internationally trusted, but the structure contained inherent vulnerabilities. The dependency on both sterling and a single commodity export would soon be severely tested by the global economic shocks of the 1930s, leading to significant monetary reforms in the following decade.