in generating financial resources for institutions, fundraising is not their raison d ’ etre. we can also think of “ fun ” raising, i. e. entertaining and exciting ways of building alumni relationships. various projects, too numerous to mention, can be undertaken. also, benefits of staying connected to one ’ s alma mater, other alumni and peers are immeasurable. networking is developed through strong alumni associations. this includes circulating information on internship, employment and other opportunities available in the various areas of enterprise alumni are engaged in. to my mind the benefits seem to outweigh the costs. your effort as we gather here tonight dovetails with one of the government ’ s key programmes. as you may be aware, the government has set itself the goals of halving poverty and unemployment by 2014. to meet these challenges, the government seeks an annual average growth rate of 4, 5 per cent or higher between 2005 and 2009, and an average growth rate of at least 6 per cent between 2010 and 2014. there are strong indications that the south african economy has reached a higher growth path. the growth rate averaged 3 per cent per annum between 1994 and 2003 as compared to 1 per cent during the decade preceding the country ’ s advent to democracy. however, growth rates in 2004 and 2005 have averaged 4, 5 per cent and 4, 9 per cent respectively. while growth is expected to decelerate somewhat this year, it is still expected to exceed 4 per cent. there is thus little doubt that the sustained application of prudent macroeconomic policies is bearing fruits. monetary policy has played its part by contributing to a low inflationary environment - inflation has been within the target range of 3 - 6 per cent for cpix for the past 34 months - which in turn has been supportive of economic growth. the maintenance of price stability, however, is not without its challenges. the globalisation of the south african economy is well documented. there is no escaping the impact of global influences on the sa economy. the recent volatility in our financial markets following the increased risk aversion of global investors towards emerging countries is an example in this regard. in addition, the recent successive monthly increases in the price of petrol as a result of the sustained increase in international oil prices bear further testimony to the sensitivity of the south african economy to global developments. as is the case internationally, the high oil price, if sustained, poses a significant threat to inflation and economic growth in south africa. there are domestically generated

2004, so did the external fund management programme. in 2004, south africa ’ s gross reserves amounted to approximately us $ 8 billion and this had grown to us $ 50 billion by 2011. however, with the most recent review, which took place this year, we decided that the funds under external management would be reduced, primarily because the latest saa supported benchmarks and related portfolios that could largely be managed internally. currently, we are at an advanced stage of reviewing the custodial arrangements we have in place, including the type of model which we would like to follow going forward. the custodial review entails : • benchmarking services received from custodians against current world custodial service standards ; • reviewing the current ratings of custodians against minimum ratings standards ; • reviewing services required from custodians against the bank ’ s business requirements ; and • determining the capabilities of custodians to provide ancillary services such as accounting, performance attribution, settlements and risk measurement and reporting. prior to the custodial review, the bank embarked on a comprehensive systems renewal project in order to upgrade the bank ’ s it and risk management systems, so as to create a superior reserve and risk management operational platform. the two projects, the systems renewal and custodian review, of course have a direct bearing on each other. we hope to make final decisions for the systems renewal later this year and hopefully be in a position to start implementing whichever system is chosen by the end of the year or early in 2014. the decision regarding custodial arrangements we also hope to make early next year. 4. asset tapering and reserves management what will keep reserves managers up at night? no doubt an important issue for reserves managers going forward is that of asset purchase tapering and the timing of policy tightening after the asset purchasing programme has been completed. the implementation of asset purchases by the us federal reserve in a bid to dampen yields on the longer end of the yield curve resulted in significant increases in prices of us treasuries, and prices of other advanced economy and emerging market bonds. in such an environment, it was not too difficult for reserve managers to earn good returns as yields rallied substantially, albeit with a fair amount of volatility. but as they say, everything that goes up must come down. the mere expectation of tapering by the us federal reserve had a significant impact on markets, bis central bankers ’ speeches introducing significant volati