, as the priority, but rather to target the pass - through from the exchange rate to inflation. the bank ’ s normal estimate of this is 20 %, meaning about a fifth of the change in the currency ’ s value shows up in the cpi. the scale of the pass - through varies from time to time, however, and at present it appears to be lower, probably as a consequence of reduced pricing power in a subdued economy. although inflation moved outside the target during the third quarter it has since returned to the target band, as forecast, registering 6 % in september and 5. 5 % in october. we have bis central bankers ’ speeches therefore not changed rates so far this year, nor have we introduced other policy measures to influence the exchange rate. this contrasts with the responses seen elsewhere. brazil has raised rates by 225 points this year, indonesia by 150 and india by 50 points. central banks have also resorted to less orthodox policies including tightening overnight rates, implementing some capital controls and creating new swap auctions – essentially, opening forward books. comparing the performance of the rand with the currencies of these other countries, we see little evidence that a more activist and experimental approach would have changed the rand ’ s direction in a meaningful way. furthermore, there are advantages to our approach, not the least of which is a less volatile output, inflation and interest rates. conclusion in essence, south africa is not a fragile country. rather, our system is anti - fragile, like a welldesigned building in an earthquake zone : it moves with the shocks so it doesn ’ t collapse. – our monetary policy stance is clear and appropriate ; – fiscal policy is vigilant in anticipation of the normalization of interest rates ; – a sudden stop is relatively unlikely for south africa ; – the end of qe is not plainly bad for sa, and could be a good thing if it heralds a return to growth in the advanced economies. thank you. bis central bankers ’ speeches

in water management, in roads and ports and in cold storage facilities. south african firms in the agricultural and agro - processing sector have the expertise, the know - how and the capital to invest in food production and processing on the continent. again, there are strong backward linkages between such investments abroad and jobs back home. it is often said that all economic progress is about moving up the value chain, producing ever more complex products. this can only be done through partnership and cooperation between bis central bankers ’ speeches the state, the private sector and our education and research communities. a major area of focus for the country is the manufacturing sector. manufacturing is important because it is a sector where productivity levels are already relatively high and the sector is able to generate well - paying jobs for millions of people. a major obstacle to faster growth in manufacturing has been a shortage of high level technical skills. that is where you come in. this university is at the cutting edge of producing the type of skills required for our manufacturing sector to move up the value chain, to enhance productivity and grow our exports. the central university of technology is the home of the centre for rapid prototyping and manufacturing. this university, supported by the national research foundation, is investing heavily in research in ‘ additive manufacturing ’, also known as 3d printing. 3d printing is likely to revolutionise aspects of manufacturing, lowering barriers to entry and allowing mid - sized economies to compete more effectively with other global players. these are exciting developments and i have no doubt that this university will play a greater role in helping our country to develop its advanced manufacturing sector. in conclusion ladies and gentlemen, despite significant challenges, south africa as a nation is in the process of determining its future ; it is a country that is growing, and with that growth comes opportunities. we must continuously raise the quality of our education system ; continuously keep up with the best developments globally so that we can produce young graduates who are at the cutting edge of the fields that they enter ; young people who will shape the future, drawing on the extraordinary strengths of all south africans. the future is contested terrain, and it will be determined by our vision of what that future could be and what we, together, do. it is largely in your hands now. again, thank you for this honorary doctorate. i humbly accept it on behalf of all south africans who are making a contribution to build a non - racial, democratic and prosperous south africa. thank you. bis central bankers ’ speeches