demand. 3. economic consolidation in 1997 the economic consolidation process forced on south africa by the events of february 1996 provided satisfying results so far in 1997. the international financial markets already signalled their satisfaction in november 1996, when stability returned to the market in foreign exchange, the outflow of capital through the balance of payments receded, and the exchange rate recovered some of its losses earlier last year. after the middle of 1996, there was a substantial slow - down in the rate of expansion in gross domestic expenditure. in the second half of 1996 and during the first quarter of 1997, total gross domestic expenditure actually declined at an annualised rate of about 2 per cent, before growth was resumed again in the second quarter of 1997. the growth rate in production unfortunately also slowed down marginally but at this stage better equilibrium has now been restored between these two basic macroeconomic activities. the current account of the balance of payments also improved as the rate of growth in imports slowed down. in the second quarter of 1997, the seasonally - adjusted, annualised current account deficit amounted to only r3. 4 billion. in addition, although adjusting only very slowly, the rates of increase in both bank credit extension and in the money supply have slowed down since the middle of 1997. measured over a twelve months ’ period, the total amount of bank credit extended to the private sector still rose by 14. 6 per cent in august 1997. however, over the three - month period from june to august 1997, the seasonally adjusted annualised rate of growth in the total amount of bank credit extended to the private sector declined to 5. 9 per cent. over the same period, the rate of increase in m3 slowed down to 11. 4 per cent on an annualised basis. finally, inflation, which threatened to run out of control earlier this year, also abated and, after peaking at 9. 9 per cent in april 1997, the rate of increase in consumer prices slowed down to 8 per cent over the twelve months that ended in september 1997. the international financial markets confirmed approval for these macroeconomic adjustments that were achieved, not without pain, but with a substantial improvement in the basic fundamentals. over the first nine months of 1997, non - residents increased their holdings of south african bonds and equities by no less than r39. 1 billion which enabled south africa to continue with the process of removing exchange controls, and also to increase its foreign reserves. the gross amount of gold and foreign exchange reserves held

like to share with you, the members of the ocbf and more broadly with the stakeholders in our banking system, a message of confidence but also of great vigilance. the reforms conducted by the regulators and the efforts made by the banks over the past decade have borne fruit and the european banking system has demonstrated its great resilience during the health crisis and then in the face of the war in ukraine. the banking sector has also managed to support government efforts to deal with the crisis and kick start recovery. but these developments should encourage us collectively to remain very vigilant in an environment marked by a rise in shocks and strong uncertainty and to pursue our efforts to bolster this resilience in order to successfully meet current and future challenges.