cannot be complacent. there is ongoing work to strengthen the regulatory architecture with a move towards a twin peaks model of financial regulation. this approach will see the consolidation of all prudential regulation of financial institutions within the bank, while market conduct regulation of the financial sector will be consolidated within the financial services board. in conclusion, significant advances have been made over the past 18 years in alleviating poverty in south africa by providing essential services to the poor and through an improved social security system. according to the recent census, marked improvements have been made, for example, with respect to the provision of housing, water and electricity with 85 per cent of south africa ’ s population now having access to electricity, while 78 of our citizens now live in formal housing. the oecd ’ s survey of south africa 2013 – released earlier this week – characterises south africa as progressing, with good institutions and generally favourable momentum in important areas. however it also recognises sluggish economic growth coupled with rising inflation and an entrenched structural unemployment and inequality challenge. south africa is an extraordinary country of great contrasts. the atlantic and indian oceans meet at the most southerly tip of the continent. the cold water current of the atlantic and the warm water current of the indian oceans perhaps reflect the contrasts that epitomise our country : a country of great wealth and extreme poverty ; of gold, diamonds, platinum and other mineral wealth that has contributed to the wealth of many nations ; a country where the first heart transplant was performed, whose skills and expertise lead many fields of science, space, finance, business and the search for global and regional peace. it is a vibrant country full of hope and promise, but a country that has to rebuild its values in keeping with a constitution that entrenches democratic principles and respect for human life and dignity. the economy needs to grow faster and more inclusively, taking account of regional and continental opportunities. this is what we are committed to, and success will be in all of our interests as together we seek ways to break the stranglehold that the prevailing global crisis has on many parts of the world. thank you. bis central bankers ’ speeches

##tibank world government bond index ( wgbi ) have contributed to the inflows. in recent months, the rand depreciated against the euro by about 7. 5 per cent and about 2. 4 per cent against the us dollar. the current account of the balance of payments has emerged as a risk to the exchange rate outlook following the widening of the deficit to 6. 4 per cent of gdp in the second quarter. this widening deficit is a consequence of declining commodity exports and increased imports and service payments. we expect the current account for 2012 to moderate somewhat to about 5¼ per cent of gdp. food and petrol prices continue to be the main upside risks to the inflation outlook. following a sharp spike in july, global grain prices appear to have stabilised and then moderated somewhat. domestic prices of maize and wheat have followed global trends, increasing by about 40 per cent and 20 per cent respectively between the beginning of june and the end of july. these increases are expected to filter through to domestic consumer prices in the coming months. following sharp decreases in petrol prices earlier this year, since august, the price of petrol has increased by a cumulative r1. 15 per litre. a further increase is expected in october. these petrol price increases are driven by international oil prices, which reached us $ 117 per barrel on 14 september. 2 oil prices have moderated in recent days to us $ 110 per barrel as saudi arabia committed to increase the supply of oil, but geo - political factors will remain a source of underlying volatility in the oil price. creating confidence with this backdrop in mind, let me turn now to say a few things about how we might think about steps to improve confidence in south africa and the region. as some of you will know, we participate in many international forums, the g20, the governors ’ board of the imf, the financial stability board in basel and the bank for international settlements, among others. participation enables us to give voice to our concerns about the trajectory of the world economy, make suggestions on how to approach or resolve problems, and influence the development of regulatory frameworks that affect us. and yet, there is little or nothing we can do, other than express our views, to help other countries find their way out of the difficult prevailing economic circumstances. the spill over of global factors to our economy can be profound, changing the size and direction of capital flows, global inflation, trade, commodity prices, and more. this means that as