Page 55 - Invited Paper Session (IPS) - Volume 2

IPS179 Wian B.

Salary EFT indexation: Preliminary
methodological considerations
Wian Boonzaaier
South African Reserve Bank, South Africa

Abstract
Alternative or non-traditional data sources are increasingly being explored to
supplement or validate survey based statistics. This area of research is
especially relevant in the context of monetary policy in South Africa, where
estimates for wage growth derived from survey based publications have
produced conflicting outcomes over the short- to medium term, even when
controlling for methodological differences. This has implications for the
inflation forecast and interest rate decisions. This paper builds the
methodological foundations needed to construct an annually chain-linked
monthly salary index based on daily interbank electronic funds transfers
derived from an automated clearing house of interbank retail payments in the
payment system of South Africa. Ultimately, the index could be used to
supplement survey based measures of wage growth, and more broadly to
validate existing monetary and financial statistics.

Keywords
Electronic funds transfer; national payment system; remuneration; bilateral
price index

1. Introduction
The Economic Statistics Division (ESD), situated within the Economic
Research and Statistics Department (ERSD) of the South African Reserve Bank
(SARB), is responsible for addressing a large portion of the recommendations
put forward via the Group of Twenty (G-20) Data Gaps Initiative (DGI), which
is currently in its second implementation phase. This has led to an increased
drive to create or uncover new data sources which will assist in complying with
the aforementioned recommendations, including validation of existing
statistical production series.
As a result, the division has engaged BankservAfrica, an automated
clearing house in the National Payment System (NPS), to explore the potential
of the data underlying its electronic funds transfer (EFT) service. This project
gained further impetus based on feedback from a number of Monetary Policy
Committee (MPC) meetings where the issue was raised that selected indicators
of wage pressure in the economy produced inconsistent growth outcomes in
the short- to medium-term. It was therefore requested that alternative sources

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