however cognisant of the current cost - push pressures and the potential of these to filter through to more generalised price pressures. these pressures will be closely monitored, and the mpc will take timeous action to ensure that second round effects do not take hold and that inflation pressures are kept in check. 6. conclusion to conclude, uncertainty in the global environment has not abated, as reflected by increased volatility in financial markets. while the global recovery has proceeded at a moderate pace, it remains unbalanced and uneven. to this end, the g20 is addressing issues of global imbalances and also reflecting on the future global monetary system. such developments will have an impact on south africa and policy developments going forward, as we are part of the global economy and one of the more liquid amongst emerging market financial markets. south africa ’ s growth outlook has improved, although it remains below pre - crisis levels and below that of other emerging and developing countries. inflation has recently trended higher, and while the bank ’ s forecast shows that cpi will breach the upper end of the target range, based on current information the mpc expects that this will be a temporary breach. however, developments will be closely monitored for any second round effects which could result in broader based price pressures. thank you. bis central bankers ’ speeches

policy divergence with the united states — a tradeoff with which i am personally very familiar. spillovers from recent policy tightening monetary policy divergence remains a familiar theme today, but the focus has obviously shifted to the consequences of tighter u. s. monetary policy for the global economy. policy divergence is an ongoing concern given that most afes and many emes have continued to pursue highly accommodative monetary policies that remain appropriate in light of their weaker cyclical positions and subdued levels of underlying inflation. many observers point to the “ taper tantrum ” in 2013 as illustrating how monetary tightening by the federal reserve can potentially have strong contractionary effects on foreign financial conditions. subsequently, the expectation that a steadily improving u. s. labor market would call for tighter u. s. monetary policy — and hence imply greater monetary divergence with our trading partners — helped drive a sharp appreciation of the dollar between the middle of 2014 and the end of last year that was accompanied by capital outflows from many emes. against this backdrop and the concerns it raises, the reaction in financial markets to the fomc ’ s 1 / 3 bis central bankers'speeches decisions to increase the target range for the federal funds rate following its december 2016 and march 2017 meetings — by a cumulative total of 50 basis points — seems benign. the yields on risky foreign bonds, especially in emes, have continued to decline to below historical norms, and global stock prices have risen. the dollar has depreciated since mid - december, especially against emes, and the emes have experienced capital inflows. in my view, this favorable reaction partly reflects a view by market participants that the rate hikes are a signal of the fomc ’ s confidence in the underlying prospects for the u. s. economy that in turn has increased confidence in the global outlook : a strong u. s. economy is a major plus for the global economy. but the main reason for the positive market reaction is that foreign output expansions appear more entrenched, and downside risks to those economies noticeably smaller than in recent years. in europe, unemployment has fallen steadily ; inflation and inflation expectations are moving toward central bank targets ; and, while brexit entails many unknowns, so far it has not resulted in significant financial market disruptions. china ’ s economy also appears to be on a more solid footing, which has helped stabilize the renminbi as well as support growth in other em