pricing of products which may thus impact on overall credit extension within the economy and ultimately consumption and hence economic growth. it is furthermore likely that banks ’ earnings will be more volatile in the future due to the effect of the forward - looking approach that is required under ifrs 9. therefore, page 4 of 9 disclosure and the education of stakeholders on how to interpret financial information under ifrs 9 will be imperative and an important consideration. over the past two years, many seminars, workshops, and training sessions have been provided by a range of organisations. however, very few of these have focused on jurisdictions from the african continent. there are factors that are unique to africa that need to be taken into account. with this workshop, we want to fill this gap and provide a platform for african regulators to discuss the specific issues and concerns that may affect them in the implementation of ifrs 9. in this context, we are very much looking forward to the presentation from the bank of zambia on its in - country regulator perspective. auditors the bis correctly points out that the effectiveness of the new standards will not only depend on how banks implement them but will also depend on the contributions of central banks, supervisors, and other stakeholders, such as auditors. the bis highlights that supervisors can play a very important role in promoting sound bank implementation practices through their banking supervision activities in a manner that complements the efforts of accosting standard setters. the auditing profession, as mentioned, is an important stakeholder when it comes to the implementation of ifrs 9, so a discussion of ifrs 9 would not be complete without reference to their role. there is little doubt that the audit profession is likely to be challenged with the introduction of ifrs 9. the reason is that the audit of accounting estimates, such as impairments, has always been a very complex area and the introduction of ifrs 9 will further add to that complexity. we are extremely pleased to have multiple representatives from the audit profession in our midst today and tomorrow. we will listen to presentations from both pwc and kpmg dealing with audit expectations, while ey will provide us with their perspective during the panel discussion tomorrow. we especially want to welcome the representatives from pwc kenya who will be sharing with us their experience to date. page 5 of 9 before i conclude, i would like to touch on two audit - related topics, namely mandatory audit firm rotation and the recent developments that engulfed the global audit firm kpmg. the independent regulatory board for

markets have been reflecting these levels of uncertainty and have been experiencing increased levels of volatility, with the vix index spiking to 30 index points in mid - march. efforts to try and find lasting solutions to the european sovereign debt crisis, currency interventions in the wake of the japanese disaster, sovereign rating downgrades and bank stress tests are all impacting on developments in financial markets. as they say, the only certainty in financial markets is uncertainty. the recent global and financial market developments are presenting challenges for monetary policy makers around the world, who have to ensure that they maintain credibility and protect macroeconomic stability by managing inflation risks, while at the same time avoiding undue damage to growth prospects by possibly acting too hastily to remove accommodative policies. bis central bankers ’ speeches 3. implications for south africa as a relatively small and open economy with sophisticated financial markets, south africa will not escape the impact of global economic and financial market developments. a third of south africa ’ s exports of manufactured products are destined for europe. the country sells commodities to asia and has been witnessing increased exports to that region. japan is south africa ’ s fourth largest trading partner, with platinum and other semi - processed metals being the major exports. south africa is a significant importer of oil. at the conclusion of the most recent monetary policy committee ( mpc ) meeting on 24 april 2011, we highlighted these international developments and indicated that, based on shortterm economic indicators, the domestic growth momentum would likely be maintained. we lifted our forecast for economic growth from 3, 4 to 3, 7 per cent for 2011. consumption expenditure – particularly by households – is holding up well, credit extension figures released last week show a better take - up of credit by businesses, implying that the recovery in investment spending will pick up and that subdued growth in gross fixed capital formation will improve. the improved reading on the most recent purchasing managers index to a level of 57, 2, with very encouraging readings for the business activity and new order components, appears to confirm the favourable outlook for the manufacturing sector. unfortunately, the employment subindex confirmed the serious challenges the country is facing with job creation. the mpc also highlighted the bank ’ s view that the risks to the inflation outlook are on the upside, with food and administered prices – particularly oil prices – being among the biggest risks. while we expect to remain inside the target range until the end of 2012, our most recent forecast, showing cpi averaging 5, 7