##winds, the outcomes would be unsustainable and inflationary. this is not some hypothetical speculation ; there are very visible examples of countries that did not get monetary policy tight enough and are paying a high price. our mandate is clear : we have a duty to step in and ensure price stability. this equates to protecting the purchasing power of households, preserving the value of savings and the global competitiveness of south african businesses. and where this requires higher interest rates, plainly we need to deliver them - as we have done. but the more material question to ask is, does this economy not need lower rates? and the answer to that is, yes. we are in a suboptimal macroeconomic space, and if we could coordinate our way to a better set of macro settings, we could be better off. i would love to see rates being lower for longer, not higher for longer. and there are things we can do, as a country, to make that possible. it is not hard to imagine reforms that bring down the country risk premium. it is also not hard to imagine reforms that lower inflation. reduced country risk would help the exchange rate. lower administered price increases would directly reduce inflation. it is also helpful to think about a lower inflation target, like those of other well - run emerging markets. but i will leave this topic for another day. all these changes would give the sarb space for lower rates. and to the extent that some of these reforms temporarily weakened demand, that would bolster the case for lower rates. so, that is one problem with'higher for longer'- it is the second - best outcome, not the first. it is what we must do in a situation where the sarb carries more of the burden of stabilising the macroeconomy. the first - best solution entails broader burden - sharing and therefore lower interest rates. the other problem with'higher for longer'is that it sounds too much like a commitment. 6 / 7 bis - central bankers'speeches over the past few years, central banks have experimented more widely with what is called'forward guidance ', and the results have not been pretty. the problem is, when you say something about the outlook for interest rates and then add all your caveats, people just hear the first part. they then get hurt when they act on the projections and do something else. worse still, central banks can feel obliged to stick with their initial commitments, even

2. a platform for electronic trade capture and matching ; 3. an efficient settlement system that meets the bis recommendations, e. g. dvp, t + 3 ; 4. a central securities depository to facilitate transfer of ownership of scrip ; 5. centralised distribution of market information ; 6. a centralised pool of liquidity, e. g. central and transparent price dissemination from a central platform. whether or not these requirements are supply - leading, demandfollowing or some permutation of these and other determinants remains moot. conclusion the challenges to which the bond market will have to respond appear, to me, to be principally two. first, the market will have to adopt to the fiscal stance of central government. this stance will reduce the need for government to fund itself through this market, in the near - and medium terms. second, i suggest, the market will need to address the problem of “ original sin ” on the sub - continent : that is, the inability of adjacent emerging and developing economies to raise financing in their own currencies beyond their own borders. resolving this dilemma on a regional basis constitutes a formidable challenge – as does the resolution of most sins! thank you for your attention.