t t mboweni : the objectives of monetary policy with reference to the independence of the south african reserve bank address by mr t t mboweni, governor of the south african reserve bank, at the free state branch of the economic society of south africa and chamber of trade and commerce, bloemfontein, on 12 april 2000. * 1. * * introduction the task of macroeconomic policy is the promotion of economic growth and development, the creation of more jobs and the employment of more people, the improvement of the living conditions of all the people of the country, and the elimination of unjustifiable discrepancies between average incomes of various groups of participants in economic activity. monetary policy, being a part of macroeconomic policy, has but an intermediate role to play in the implementation of overall macroeconomic policy. it is expected of monetary policy to create and maintain a stable financial environment within which overall economic activity can be expanded. none of the above ultimate objectives of macroeconomic policy will be attainable in an environment of unstable financial conditions. although overall financial stability by itself cannot guarantee the achievement of the ultimate macroeconomic objectives, it is an important precondition for reaching those goals. in order to comply with its obligation and to meet its commitment, the central bank should pursue its objectives with a medium and longer term view in mind. financial stability should, for example, be maintained throughout the business cycle in both the expansion and contraction phases of the economy, and should in the democratic political system of periodic elections, stretch beyond the duration of successive governments. it is inter alia for this reason that central banks need some autonomy for the execution of their duties. 2. primary objective of the bank the primary or strategic objective of the reserve bank is therefore to achieve and maintain stable financial conditions in the country. this objective is spelled out in both the constitution of the republic and in the south african reserve bank act. in these acts it is recognised that only by protecting the currency can balanced and sustainable economic growth be achieved. the question may be asked what is meant by the term financial stability? in a broad sense financial stability can be defined to include price stability as well as stable conditions in the financial sector as a whole. price stability is achieved when changes in the general price level do not materially affect the economic decision - making process. although relative price movements will still have an impact on production, consumption and investment, the rate of inflation or deflation is not an important factor in the

inclusion is not just about the fulfilment of legal obligations. it is diversity at its best and thus a genuine enrichment. we therefore want to continue on this successful path. gender equality is a goal that we have been pursuing since 1994. but we still have a long way to go. since the bundesbank's first equality plans were drawn up in 2003, we have more than doubled the share of women in management positions. that said, it is still only one in three managers that are women. since the middle of last year, it has become a legal requirement in germany that half of all managers in the federal public service should be women by the end of 2025. this is the goal we are working towards. we therefore want to encourage even more women to take on management responsibility. this is why we have launched a special talent programme for women at the bundesbank. at the same time, however, we will continue to adhere to the principle of " selecting the best candidate ". with our strategy, we are promoting additional dimensions of diversity. this includes shifting sexual orientation from a taboo topic to an everyday diversity issue. when people have to hide their sexual orientation, they have to live under constant pressure of concealment. it is therefore our responsibility to create a work environment in which all employees feel at ease. staff networks play an important role in this. at the bundesbank, we have a very active rainbow network and a network for women. we value highly the fact that our employees are taking action on these important topics. these networks are a forum for sharing experiences and providing mutual encouragement. they help us to ensure the visibility of the respective community – both within the bank and externally. thanks to the rainbow network, the bundesbank had its own walking group at the frankfurt pride parade for the first time this year. i support the networks and their activities wholeheartedly. employees need to be able to count on the support of their colleagues, if they feel discriminated against for whatever personal reason. diversity in the broader sense also includes different cultures and nationalities. as you might know, i used to work for the bank of international settlements in basel. there i experienced how enriching it is to work with people of different cultural backgrounds. however, in this respect, the bundesbank still has potential for improvement. the share of employees with a migration background is only half as high as in the private sector. to address this imbalance, we successfully launched a