derivatives association ( isda ) has consulted widely on this issue, 2 and concluded that market participants would prefer the historical median approach, with an adjustment spread based on five years of data. 3 this method would be robust against data outliers resulting from unusual market conditions, as well as potential manipulation. 4 consequently, this method was adopted in cash and derivatives markets in the united states, united kingdom and many jurisdictions that were impacted by the london interbank offered rate ( libor ) transition. 2 / 5 bis - central bankers'speeches nonetheless, in south africa, market participants are not only concerned about dealing with data outliers ; they are also concerned about structural shifts in the behaviour of the jibar, especially since the sarb's migration to a surplus system for implementing monetary policy in june 2022. it appears that this reform has squeezed liquidity premiums, in that the spread between zaronia and jibar has narrowed somewhat. the mpg is currently finalising its work on the adjustment spread methodology to ensure that the chosen methodology considers all the idiosyncratic factors that would concern market participants. it is also important for market participants not to over - rely on fallbacks to facilitate legacy jibar referencing contracts. the best way to minimise risks would be to actively migrate to zaronia referencing contracts as soon as practicable. 5 there will nonetheless be instances where, despite best efforts, it may not be possible to transition or adjust certain contracts before jibar ceases. these so - called tough legacy contracts will require regulatory measures to facilitate their transition. as such, it may be necessary for the mpg to consider a synthetic jibar, similar in structure to the current forward - looking jibar, to minimise the impact on systems and processes. furthermore, the mpg, the sarb and the financial sector conduct authority will consult with national treasury on the appropriate regulatory instruments for ensuring contract continuity and safe harbour provisions for the protection of contract parties, supervisors and the benchmark administrator. building a new foundation shortly after the mpg conference in april 2023, the remaining us dollar libor panels were discontinued. this concluded a massive decade - long global project to replace libor. 6 reflecting on this effort, the co - chairs of the financial stability board's official sector steering group, nikhil rathi and john c williams, concluded that it had been like building a new foundation under an existing home – an undertaking of extreme difficulty, one many doubted would succeed, and

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