country, as happened in the past year. the continued integration of south africa in the world financial markets will force a greater use of the versatile major driving force of globalisation, and that is electronic communication. the emergence of a global electronic network for trade ( e - commerce ), financial transactions ( epayments ) and money transactions ( e - money ) makes the retention of exchange controls on current account or capital transactions virtually impossible. thirdly, will the process of financial globalisation continue, and will it provide further stimulus to the expansion of financial markets? it is true that globalisation played havoc with the world financial markets last year and created many macroeconomic hardships, particularly in the emerging markets of the world. it is also true that there is some backtracking by certain countries from the process of globalisation. it is also true that the integration of the world financial markets is a process that is irreversible. south africa ’ s attitude is therefore not to withdraw from globalisation, but rather to learn from the lessons of the past, and to adapt more effectively to the vicissitudes of this new world financial environment. in the final situation, south africa with its low domestic savings rate and urgent requirement for the expansion of its production capacity, needs foreign investment to finance economic development in the interest of all the people of this country. the process of globalisation brings with it growing competition amongst the approximately thirty countries that have now been grouped together as the emerging markets of the world. investors, mainly from the industrial countries, have many options on where they can invest their funds. south africa came through the financial turmoil of the past eighteen months relatively well. the banking sector stood up to the strains without any major mishap, the financial markets continued to function effectively, and the macroeconomic adjustments were painful but nevertheless less severe than in most of the other affected countries. perhaps our fiscal and monetary policies were not as bad as local critics perceived them to be. the final assessment is now being made in the global markets. some foreign investments are beginning to flow back into south africa. since the beginning of this year, non - residents have again increased their holdings of south african bonds by almost r4 billion. the world financial markets are returning to a situation of more stability. serious efforts are now being made at the multinational level to improve the architecture of the world financial system. after the turmoil of the past eighteen months, a period of sobering consolidation will at this stage have a saluta

a lecture by lesetja kganyago, governor of the south african reserve bank, at the unisa graduate school of business 30 august 2017 balanced and sustainable growth : the role and mandate of the sarb good evening, ladies and gentlemen. the mandate and role of central banks is a hotly debated topic in many countries around the world. in south africa, we tend to engage in this debate through rhetoric rather than facts. in our article published on 2 july, we set the basis for a more informed discussion. 1 i would like to open the next chapter in that dialogue tonight. let me start by asking : why does our money have value? why can you exchange it for goods and services? the money is not backed by silver or gold or platinum. it is not backed by land. it is not pegged to another currency, such as the dollar or the pound. it works because of trust – trust in a promise made in the constitution, which gives the south african reserve bank ( sarb ) a very specific job : “ to protect the value of the currency in the interests of balanced and sustainable economic growth in the republic. ” today, i will explain how we go about doing that job. while there are questions of constitutional principle in recent debates about the sarb [UNK] s mandate, i would prefer to give you the economic argument for what we do. independence needs to be earned ; it is not enough for it to be kganyago, lesetja. „ why low inflation is the best way to stimulate economic growth [UNK]. the sunday times, 2 july 2017. page 1 of 17 enshrined in the constitution. the economic argument is crucial for assessing our effectiveness – and for understanding why the sarb should be independent. there is no distinction, and hence no choice to be made, between protecting the value of the currency and attending to the socio - economic well - being of south africans. destroying the value of the rand through inflation, reducing what it purchases in terms of daily sustenance, would be of no benefit to anyone. the recent report by statistics south africa shows that our tragic rise in poverty coincides with a time of rising inflation and weakening growth, between 2011 and 2015. 2 while we are happy to discuss alternatives to policy targets and to the way in which we now make monetary policy, the case for the existing framework is very strong ; our own experiences and those of other countries overwhelmingly support it. our monetary policy framework has helped us to achieve