since april 2016. this neutral stance has facilitated a turnaround in headline cpi inflation, which had been negative for 24 consecutive months. 3 / 10 bis central bankers'speeches current monetary policy stance remains appropriate for an extended period in view of the stable inflation and growth prospects for 2017. the neutral policy stance should anchor inflation on a gradual ascent towards its historical norm and ensure medium - term price stability. this policy is of course predicated on domestic inflation and growth prospects keeping to their projected trajectories. property market and macroprudential policy the government has implemented macroprudential policy measures – commonly known as property cooling measures – since 2009 to promote a sustainable residential property market and financial prudence among households. the property market has substantially stabilised over the last three years. private residential property prices have declined by nearly 12 % over the last 14 quarters. this follows an increase of close to 60 % over 17 quarters. growth in housing loans, which used to be about 20 % year - on - year in 2010, has moderated to 4 % in q1 2017. the risk profile of housing loans has also improved, as borrowers now tend to have lower loan - to - value ( ltv ) and total debt servicing ratios ( tdsr ). only a negligible share of housing loans is in negative equity. it is, however, not time yet to ease the cooling measures. they remain necessary. first, underlying demand for private residential properties remains firm amidst a continued low interest rate environment. recent project launches have seen relatively good take - up. transaction activity in q1 2017 increased by close to 40 % compared to average quarterly transactions since the implementation of the tdsr in 2013. at the same time, notwithstanding rate hikes in the us, mortgage rates in singapore remain very low. the risk of a renewed unsustainable surge in property prices is not trivial. second, investors continue to search for yield and safety in property markets across the world. regional property markets have been buoyant and their respective authorities have, in the past six months, introduced further property cooling measures. for instance : - china, hong kong, south korea, and new zealand have tightened prudential requirements such as housing loan - to - value ratios and debt servicing ratios. - in australia, new south wales will be doubling the stamp duty surcharges for foreign investors. we must be vigilant that tightening measures elsewhere do not lead to spill - over of investor demand into the

executive management department an address by lesetja kganyago, governor of the south african reserve bank, at the launch of the mpc schools challenge, pretoria 21 july 2017 good morning ladies and gentlemen decisions whether to cut, increase, or keep interest rates unchanged are of enormous importance to the economy general, and they affect most people, either directly or indirectly. this often raises the question : how do central banks make these decisions, and specifically, what factors do they take into account in making these decisions. one of the channels that many central banks use to explain how they make these decisions and what factors they take into account is to run a competition for high school learners. typically, these competitions involve a group of learners forming themselves into a monetary policy committee and making a case either to cut, increase, or keep interest rates unchanged. the south african reserve bank began a pilot in 2012 in partnership with the gauteng department of education to : offer learners the opportunity to enhance their understanding of monetary policy and how it relates to the economy as a whole ; help learners understand better how the economy works ; assist learners to better understand how the sarb ’ s monetary policy committee makes decisions ; improve broad economic literacy in the country ; create an opportunity for learners to put the classroom economic theory into practice and thereby enhancing their understanding of economics ; stimulate interest among learners in a career as an economist ; and raise awareness and understanding of the role and responsibilities of the sarb. the mpc schools challenge has since been expanded to cover 7 provinces. we have also since partnered with the department of basic education and the provincial departments. we have had 450 schools participate in the challenge since 2012, involving 1 340 learners. by participation we mean schools whose team submitted an essay. a requirement of the programme is that participants take a combination of economics and mathematics subjects, excluding maths literacy. certain schools therefore do not qualify as they do not provide this learning combination. next year, the challenge will become national with the addition of kwazulu - natal and the western cape provinces. hence, today ’ s launch of the mpc schools challenge. the way the competition works is that each school must constitute a team of four learners who model themselves on the monetary policy committee ( mpc ). the team presents its case to a panel of sa reserve bank economists. representatives of the department of basic education moderate the outcome. to ensure that all entrants have access to the same basic data, the sarb provides learners with relevant economic data