the us. already, denmark and canada have cut interest rates, while the proponents of interest rate increases in the uk are retreating. subsequent to the ecb ’ s announcement to fend off deflation threats through an asset - purchase programme, the swiss franc appreciated strongly, increasing the risk of falling exports and a possible contraction. in asia, the advent of abenomics raised concerns that china could respond in an effort to protect its exports market share and with its growth easing to 7, 4 per cent for the fourth quarter in 2014, the lowest in 24 years, devaluation of the chinese yuan may be considered a possible policy option. bis central bankers ’ speeches in summary, the further quantitative easing may in the short term increase global liquidity and lead to capital inflows to emerging market economies, but this may be accompanied by increased currency volatility on the back of dollar strength and in some countries weaker growth. currency devaluations flowing from quantitative easing in external markets may also have a negative impact on countries that export to those countries. currency risk, sovereign and corporate downgrades for the sub - saharan african region, the past five years of highly accommodative monetary policies in the us, europe and japan have stoked the currency risk associated with the increase in sovereign debt issuance. the persistent search for high - yielding securities presents an additional dimension of risk for african countries. backed in recent years by comparatively stronger regional growth, african nations are now able to issue billions of dollars in sovereign bonds, prompting the imf to issue a warning that too much debt in the region could derail the best economic period observed in this generation. the uptick in borrowing in the region lifted public debt to a ten - year high of 35 per cent of gdp in 2014. although such debt levels are much lower than in europe and some asian countries, the associated currency risk is significant. the cost of servicing a us dollar - denominated eurobond, issued by an african state may look cheaper than that of a debt issue in local markets, but if the relevant country ’ s currency declines, the cost of foreign borrowing could increase, thereby exerting unwelcome pressure on national budgets. this risk is more pronounced in oil - exporting countries that draw a significant portion of government revenue from their energy sectors. as an illustration, russia ’ s credit rating has been downgraded to below investment rate for the first time in a decade. a number of oil

in the current account. while the exchange rate has been an important shock absorber for the south african economy, some concern has been expressed regarding its volatility. we have not attempted to intervene directly in the foreign exchange market as we do not believe that such bis central bankers ’ speeches intervention would be effective, given the size of south africa ’ s foreign exchange market, and our relatively low level of foreign exchange reserves of around us $ 50 billion. fortunately we do not suffer some of the negative balance sheet effects that have led to a “ fear of floating ” in a number of emerging economies : we do not have significant currency mismatches and our corporates, banks, households and government have relatively small net foreign currency exposures. however, volatility does make it difficult to plan and make long term investment decisions. from a monetary policy perspective, our focus is not to try and influence the exchange rate, but rather to focus on preventing the second round effects of the depreciation from impacting on the overall inflation rate. as i will touch on later, the exchange rate has had an impact on inflation, and remains a significant risk to the inflation outlook. south africa ’ s growth performance in the post - crisis period has been disappointing, having averaged 2, 8 per cent since 2010. this can be attributed in part to the slow recovery in our major trading partners. in 2013, growth averaged 1, 9 per cent, well below potential growth currently estimated to be between 3, 0 and 3, 5 per cent. the bank ’ s forecast for growth in 2014 and 2015 is 2, 6 per cent and 3, 1 per cent for these two years respectively. while this is an improvement, it is still below potential, and likely to have a minimal positive impact on the unemployment rate, which currently stands at 24, 1 per cent. employment growth has been slow, and what growth there has been has mainly been in the public sector. for example, in the year to the fourth quarter of 2013, non - agricultural formal sector employment grew by 0, 5 per cent or about 41, 000 jobs, of which 39, 000 were in the public sector. the constraints to growth are mainly structural in nature, but in the near term there are two main risks to the growth outlook. the first is the uncertainty of electricity supply. south africa ’ s electricity supply has been constrained for some time, and has no doubt impacted on investment decisions in the economy. the current tight conditions on the grid