mr. stals looks at the future of financial co - operation in southern africa speech by the governor of the south african reserve bank, dr. chris stals, at a conference on southern africa : resources, investment and trade, arranged by forum southern africa limited in london on 10 / 7 / 97. 1. the reintegration of south africa in the world economy good progress has been made over the past four years with the reintegration of south africa in the world economy. the political and social changes introduced in south africa paved the way for the removal of international economic punitive actions that partly isolated the country ’ s economy from the rest of the world during the ten years preceding the fully democratic election of a government of national unity in april 1994. even before the election took place, the rest of the world gave its support to the moves towards democracy by lifting sanctions, boycotts, disinvestment campaigns and trade restrictions. since 1994, the following major changes took place in south africa ’ s international economic relations : ( i ) south africa became a full participating member again in various multinational institutions such as the world bank, the international monetary fund, the united nations and the african development bank. ( ii ) agreements were entered into with the world trade organisation for a substantial revision over a five year period in the protective import tariff structure, and certain discriminatory export subsidies were removed. ( iii ) exchange controls were substantially relaxed to introduce full convertibility for current account transactions, to remove all exchange controls applicable to non - residents and gradually to lift the remaining exchange controls applicable to the outward investment of capital by south african residents. ( iv ) an extensive liberalisation programme of the south african financial markets included major changes in the capital market, e. g. to allow for foreign and corporate ownership of stock broking members of the johannesburg stock exchange, and the opening up of the south african banking sector for foreign competition. there are now 17 foreign banks with branches and subsidiaries in south africa, and about 60 foreign banks with representative offices. ( v ) a number of new bilateral, regional and international economic co - operation agreements were entered into, such as the southern african development community ( sadc ) and the arrangements with the european union for closer economic co - operation. these changes have had a material effect on south africa ’ s international economic relations and are reflected in a very visible way in the south african balance of payments. over the three years 1991 to 1993, the current account of the balance of payments

##minbi was added to the sdr basket. we made our first actual investments in 2014, following two years of preparations. i consider this to be our early contribution to the increased international role of the renminbi. dear colleagues, there are two main reasons why we decided to “ go to china ”. first, quite obviously, we were attracted by the higher yield offered by renminbi - denominated bonds – particularly given the low interest rate environment that we live in. and, second, the renminbi market also offered us new opportunities for much - needed portfolio diversification, as renminbi yields have little correlation with global yield movements. 1 / 3 bis central bankers'speeches in 2012 – 2014, there were two possible paths for us to enter china ’ s onshore market. the first was using the qualified foreign institutional investor scheme, or qfii. the second avenue was via bilateral agreements with the pboc. the bank of lithuania chose the qfii pathway. we liked that qfii status memorandum of understanding opened doors for china and lithuania - based investors to invest in the respective markets. moreover, the qfii scheme offered larger investment scope, including the possibility to trade equities onshore. such opportunity was itself very attractive – once you take the long - term perspective into account. indeed, we saw our investments in china as a strategic, long - term exercise. given this long - term horizon, the fact that the qfii scheme provided limited possibilities to repatriate our investment capital was not a big issue. since then, we have accumulated crucial know - how in managing the renminbi portfolio. this know - how has been recognised by the ecb as well. during the first half of 2017, the ecb invested in the renminbi an equivalent of eur 500 million of its foreign reserves. since the first quarter of this year, we, together with banco de portugal, are the sole active managers of the ecb ’ s renminbi foreign exchange reserves, managing the portfolio on a day to day basis. i consider this to be a significant recognition of the level of competence and experience in our institution. dear colleagues, since the beginning of its engagement in china ’ s onshore market, the bank of lithuania has been running the renminbi portfolio in a manner that embodies long term, conservative and low volume trading philosophy. our renminbi holdings currently stand at around 2 % of our financial