the repo has averaged 8 % over the inflation targeting period, and just 6 % since the global financial crisis. as i always remind people, if you want lower rates, you need lower inflation. we see this process working once again at the moment : our forecast model indicates inflation will be close to 4. 5 % over the next few years, which is where we want it – in the middle of our target range. given the weak economy, our model suggests we might have room to cut rates over the next year or so. while the sarb recognises the role that macroeconomic policy has to play in the economy, the primary contribution monetary policy can make to growth is smoothing output fluctuations over the business cycle. the current challenges constraining economic growth are primarily structural in nature. to ensure that monetary policy settings have a sustained positive impact on growth, they should be appropriately supported by other macroeconomic policies. the longer - term costs of higher inflation and a deterioration in inflation expectations have potentially adverse impacts on policy credibility, consumer purchasing power, borrowing costs, and the global competitiveness of south african firms. to make a marked impact on potential output and employment levels, what is required is the implementation of prudent macroeconomic policies underpinned by credible structural policy initiatives. tough times call for tough actions. page 6 of 7 monetary policy is not a substitute for structural reform. price and financial stability is, however, key to ensuring that any structural reform agenda is successfully implemented. the sarb remains committed to fulfilling its mandate in this regard. conclusion allow me to conclude. many of the existing and emerging challenges confronting the global economy today require the strengthening of cross - border cooperation. we therefore need to strengthen our resolve to seek rules - based multilateral solutions. in a highly interconnected world, unilateral action, especially in the systemically relevant economies, is not the solution to fixing trade imbalances. instead, it undermines confidence, increases adverse spillover effects, and ultimately reduces global growth. central banks and monetary policy have come under increased attention around the world recently. there are expectations that monetary policy should shoulder more responsibilities in addressing growth constraints. however, these expectations need to be based on the constitutional or legislative mandates of central banks. they also need to acknowledge the merits of central bank independence in safeguarding macroeconomic and financial stability, which is key in ensuring that the economy is on a sustainable growth path. in this regard, i would like to reiterate that the

little over the past year. that is, there has been a rise in the share of employees who would like to work more hours than they do. they represent additional spare capacity. a rising share of part - time employment has been a structural feature of the economy over recent decades, reflecting both demand - and supply - side factors. 5 but the growth of full - time employment has been quite subdued since 2012, rising only briefly above its 20 - year average of 1. 3 per cent per annum. 7 / 14 bis central bankers'speeches once again, the national outcome obscures contrasting experiences across the mining and nonmining states. during the mining investment boom, full - time employment grew strongly in the mining states, whereas it was little changed across the rest of the country ( graph 7 ). 6 labour was going to where it was in greatest demand and being paid relatively handsomely – in both mining and non - mining sectors in the mining states ( see below ). 8 / 14 bis central bankers'speeches since 2012, however, the situation has reversed. full - time employment in western australia and queensland hasn ’ t increased and the unemployment rate across those two states has risen noticeably. that makes sense. from 2012, mining investment and commodity prices were in sharp decline. in addition to the retrenchment of mining - related employment, those forces have also had a noticeable knock - on effect to non - mining industries in those states, as the buoyant effects of strong growth of the population and household expenditure have been unwound in concert with conditions in the mining industry. the decline in full - time employment over 2016 appears to reflect a further decline in demand conditions within the western australia economy. one important part of that, the property market, has become progressively weaker, as i ’ ll discuss in a minute. moreover, wages appear to be adjusting to bring wage levels back towards those of the other states ( graph 8 ). part of that adjustment is occurring via a decline in wages in the mining sector relative to wages in other sectors. liaison reports suggest that wage pressures will be quite subdued in the mining states for a time. as that adjustment occurs, it will weigh on the growth of nominal demand in the mining states. 9 / 14 bis central bankers'speeches interestingly, full - time employment in the non - mining states remained weak up until about 2014. thereafter, those states have benefited not only from the decline in interest rates, but also from the positive effect on their tr