to account for its performance. i shall touch on this last aspect again in a moment. secondly, the inflation - targeting framework gives the responsibility for achieving the target to the central bank, and specifically to the reserve bank's monetary policy committee, acting independently and under a clear mandate to deliver the target. it also gives the mpc the means to achieve the target, through its decision on setting the reserve bank's repo rate at each of its meetings. the framework thus ensures that there is a clear allocation of responsibility ; and it ensures that interest rate decisions are taken by a competent authority dedicated to the task and acting independently. thirdly and fourthly, the inflation - targeting framework is one that delivers a high degree of transparency and accountability. transparency and accountability is achieved through the full statement the mpc issues immediately after each meeting, through the range of publications the reserve bank issues setting out its view of developments, and through the public appearances the governor and his colleagues make in explaining the reserve bank's policy activities. i think this is a very important and beneficial part of the process for several reasons - partly because it is right that in a democratic system public agencies should be required to be open and accountable in explaining their activities ; partly because that process hopefully helps to maintain public confidence in the performance of the agency and public support for the objective of low inflation ; partly because that in turn should encourage business and individuals to conduct their affairs on the basis that low inflation will be maintained ; and partly because openness and accountability helps promote a better public debate on the issues. these are all elements that i believe help to strengthen the effectiveness of the inflationtargeting process. this framework has, of course, been tested in the past 18 months by the inflationary shocks the economy has faced from the fall in the value of the rand in the latter half of 2001 and the accompanying upwards pressure on food prices and fuel costs. the steps taken last year to raise interest rates were necessary to prevent these shocks generating a self - reinforcing process of rising inflation. as indicated in the statement issued after last week's meeting of the mpc, there are now signs that the inflationary pressures are beginning to abate and that the outlook for inflation is improving, though there is little room for complacency given the considerable risks we still face. but to return to my initial impressions, what is particularly encouraging, i believe, is that the coherent and responsible policy framework provided by inflation - targeting has demonstrated

its ability to address the shocks in a steady and considered manner and, in doing so, has helped considerably to maintain confidence in the economy. this is particularly evident in the international markets, where confidence in the fundamentals of the south african economy has undoubtedly been a factor in the recovery of the rand ; and it is evident, too, in the positive attitude to south africa encountered more generally abroad - notably, for example, in the upgrades that have already been put in place by the rating agencies, with further upgrades in prospect. this, more than anything, - a well - structured policy framework, steadily and consistently pursued - is what has helped the south african economy to continue to grow through the current world slowdown. this is strong evidence that a commitment to low inflation works, in helping to maintain sustainable growth, and that it will help us to achieve the future growth that is essential to enable all of us to develop the huge potential of this fine country.