, oil prices were still falling, and to levels below the assumptions built into our forecast. accordingly, we took out some insurance in the form of a 25 - basis - point cut in interest rates. the reaction to this cut across the yield curve and in the exchange rate would help to cushion the blow to the economy from the oil - price decline, bringing us back sooner to full capacity and sustainable 2 per cent inflation. it would also help mitigate the rise in the debt - to - income ratio by reducing the drop in income, although debt levels could rise at the margin. bis central bankers ’ speeches we knew that financial markets would be surprised by the move in january, and we generally prefer to avoid surprises. but we will do what is necessary to fulfill our inflationtargeting mandate. over the following weeks, we saw inflation decline as expected, and output expand in line with our projection. we saw financial conditions ease, and oil prices stabilize in a range reasonably close to our january projection. this made us feel increasingly comfortable with the amount of insurance we had already taken out, which led to the decision to keep rates unchanged earlier this month. the negative effects of lower oil prices are beginning to appear ; the positives will take longer to emerge. so we need to watch these competing forces play out in the economy, and the january rate cut has bought us some time to monitor the situation as it evolves. some have characterized this as a move to “ data dependency. ” i have to say i find this a bit strange. data are always crucial in determining how the economy is progressing. even in extraordinary times, central banks depend on data to help them evaluate how the economy is performing relative to expectations. as our economy gradually gets back to normal, we will continue to speak with business leaders to get their perspectives. we will continue to watch the data closely, as we always do, and see how the numbers evolve relative to our forecasts. and we will look to market participants to keep watch on the same data, and form their own opinions about what they mean. our communications focus on explaining how we expect the economy to unfold and being transparent about the risks that the central bank is weighing. all else equal, this should help reduce the chances of surprising markets. still, in normal circumstances, it ’ s natural that there would be volatility as economic surprises occur. but, we think it best to have this volatility reflected in prices in informed, well - functioning financial

credit act, to be implemented in the middle of this year will provide further protection to consumers. there are however always two sides to every transaction, and consumers should also act responsibly when taking on further debt. 3. accountability of the bank as noted earlier, our operational mandate is to keep cpix inflation between 3 to 6 per cent and the bank has autonomy in the conduct of monetary policy. it is well recognised that autonomy goes hand in hand with accountability. thus, one of the primary measures of accountability relates to how the bank has performed in relation to its operational mandate. monetary policy has been successful in achieving the inflation target since september 2003 when cpix moved to within the target range. this allowed for a reduction in the repo rate by 650 basis points between june 2003 and april 2005. in 2006, in response to perceived risks to the inflation outlook, the monetary policy committee increased the repo rate by 50 basis points at four consecutive meetings from june. despite this adjustment, economic growth has remained strong and we expect growth rates of around 5 per cent to be sustained. although monetary policy cannot claim all the credit, its contribution to the economy ’ s robust growth performance over the last couple of years is well recognised in many circles. our accountability extends beyond simply achieving the inflation target. since the announcement of an inflation target in south africa, any ambiguity about the ultimate goal of monetary policy has been removed. the smooth conduct of an inflation targeting framework implies a great deal of trust and confidence on the part of the public in a central bank ’ s ability and determination to achieve the target. without this credibility in the eyes of the public, a central bank ’ s policy goal is not easily achievable. since the introduction of an inflation targeting policy framework, the bank has introduced a number of initiatives to improve transparency and communication with all its stakeholders to enhance the credibility of monetary policy. in fact, communication plays an important role in fulfilling the bank ’ s obligation of accountability. for example, decisions of the monetary policy committee ( mpc ) are announced after each meeting at a televised media conference, where the motivation for the decision is explained. media representatives also have an opportunity to question the monetary policy decision and the policy stance. the publication of a bi - annual monetary policy review also broadens the understanding of the aims and conduct of monetary policy. the review analyses developments in and factors influencing inflation, assesses recent policy developments and considers the outlook for inflation. in conjunction with statements after mpc