survey undertaken in 2007 and it is the third such survey conducted in independent namibia. the survey assesses the level of bis central bankers ’ speeches access to, and use of financial services by the adult population as well as the underlying reasons. for the first time in namibia, 2011 finscope also assessed the level of financial literacy in the country, which is a critical benchmark for planning purposes and, indeed, for the execution of the financial literacy initiative. the findings of 2011 finscope survey reveal an array of progress in expanding the frontiers of financial inclusion. of particular significance is the level of financial inclusion, which is now assessed to have increased from 48 percent in 2007 to 69 percent by 2011. put differently, financial exclusion, which stood at an estimated 51. 7 percent in 2007, has significantly fallen to 31 percent by 2011. this quantum of progress in a space of four years is a result of the effectiveness of policy and concerted efforts by the financial services industry to bring services to the doorsteps of the previously unserved and underserved. i therefore wish to seize this opportunity to commend the financial services industry for moving in the right direction. honourable minister, ladies and gentlemen, the survey findings also unravel the challenges and opportunities for targeted interventions going forward. access per se may have improved, but the picture is not entirely rosy to warrant us to be smiling all the way to our workplaces. relatively high bank fees hit hard low - income earners and discourage formal banking as a safe haven for saving and other financial transactions. unbanked persons are especially exposed to the vulnerabilities and risks associated with the cash economy and high service fees of alternative financial services. still, about two - thirds of the population, that is 64 percent, do not have access to insurance. therefore, we still have a long way to go. to address some of these challenges, the bank is working closely with the commercial banks for the establishment of the basic bank account for low - income earners and smes. among its features, the basic bank account will attract low transactional fees and provide for a bundle of free transactional services per month. when finalized, this product innovation is expected to improve access to banking for the unbanked as well as cost - effective services for low - income clients. we will not stop here, director of ceremonies, but will continue to look at other bank fees and charges that warrant further attention in line with the payment system vision 2015, launched some

the instruments used today for the fine - tuning of the liquidity and interest rates in the south african market. there is, however, one possible consequence which we should be aware of and prepared for. in the economic literature on inflation targeting, a concern has been expressed that direct inflation targeting could easily lead to excessive short - term - and even medium - term - fluctuation in the nominal ( and real ) exchange rate. this has been a common experience in inflation targeting countries. there are many causes for the observed fluctuations in the exchange rates. in some countries strong fiscal and structural policy adjustments have given a support to such changes, as well as portfolio shifts. in the case of south africa, the exchange rate is included as an important element in the macroeconomic monetary policy model used by the reserve bank. exchange rate changes come out as a result of the policy process and not as an independent objective. greater nominal exchange rate changes, if these should materialize, is a concern for namibia for reasons i already have touched upon. however, these consequences are not likely to be severe. exchange rate fluctuations are nothing new to the financial and commercial community in namibia. it should also be emphasized that an inflation target could in itself promote considerable stabilization of the nominal exchange rate. so far, experiences with inflation targeting regimes indicate that the largest fluctuations are prompted by a lack of credibility of the regime. as credibility improves, the exchange rate variability should generally be limited to normal fluctuations in the real exchange rate. international trends in exchange rate arrangements as we are entering a new decade, fixed exchange rate systems seem generally to be replaced with floating exchange rates. the international foreign exchange market is now dominated by three major currencies - the us dollar, the yen and the euro - which are floating against each other. none of these three will have explicit inflation targets as the objective for monetary policy, but in practice their orientation of monetary policy is one of implicit inflation targeting. in the us, for example, the federal reserve has made it very clear that it is its assessment of inflationary pressures and the outlook for inflation that is the major determinant of any monetary policy adjustments. although the european central bank has adopted a system of monetary targeting, in practice the monetary policy regime resembles inflation targeting quite closely. it is more difficult to classify monetary policy in japan, but the fact is that inflation has been brought down to very low levels. the trend among industrial countries and emerging economies appears to be the adoption of formal inflation targeting. although