, and the government ’ s new economic stimulus package are expected to underpin the economy. however, attention should be paid to growing risks of downward pressures on the economy induced by a possible further slowdown in overseas economies as well as by developments in foreign and domestic capital markets. with regard to prices, import prices are rising, mainly reflecting the depreciation of the yen. domestic wholesale prices are declining somewhat mainly due to the decrease in prices of electrical machinery. consumer prices continue to be somewhat weak owing to the decline in prices of other imported products and their substitutes, despite the increase in prices of petroleum products. corporate service prices are still falling slowly. this report was written based on data and information available at the time of the bank of japan monetary policy meeting held on february 9, 2001. the bank ’ s view of recent economic and financial developments, determined by the policy board at the monetary policy meeting held on february 9 as the basis for monetary policy decisions. as for the conditions surrounding price developments, the recent yen depreciation is exerting upward pressures on prices. moreover, the balance between supply and demand in the domestic market is projected to be on a gradual improving trend, while an economic recovery is expected to continue at a moderate pace. recently, however, the pace of recovery seems to be slowing and crude oil prices, which had been exerting upward pressures on prices, are falling. in addition to the declining trend of machinery prices due to technological innovations, the decrease in prices of consumer goods arising from the streamlining of distribution channels, and the reduction in communications fees aided by deregulation will continue to exert downward pressures on prices. overall, prices are expected to be somewhat weak for the time being. in the financial market, the overnight call rate is generally moving around 0. 25 percent. interest rates on term instruments have been declining somewhat. the japan premium remains negligible. yields on long - term government bonds have declined to around 1. 4 - 1. 45 percent. the yield spreads between private bonds ( bank debentures and corporate bonds ) and government bonds are mostly unchanged or expanding somewhat. stock prices continue to be weak and are moving around the lowest level recorded since the beginning of 2000. in the foreign exchange market, the sharp depreciation of the yen since late december has come to a pause. the yen is currently being traded in the range of 114 - 117 yen to the u. s. dollar. with regard to corporate finance, private banks

t t mboweni : the foundation has been laid1 speech by mr t t mboweni, governor of the south african reserve bank, at the bmf corporate update gala dinner, gallagher estate, 18 june 2004. * * * one of the institutional arrangements arising out of the political negotiations process at the world trade centre in kempton park was the creation of the transitional executive council ( tec ), a sort of “ provisional government ”. the tec as many will recall, established a number of sub - councils. i served on the sub - council on finance. effectively, the then government could not take any major economic decisions without the concurrence of the tec sub - council on finance. those were nice days when we had power without the stress of responsibility! one of the problems / constraints facing the economy at that time, was that the country only had foreign reserves to cover for plus / minus three weeks of imports. this was indeed a crisis for an economy as big as ours. at that time, south africa ’ s gross domestic product at market prices was around r480 billion. for the sake of perspective, today ’ s gdp at market prices is r1. 2 trillion. the then minister of finance, mr derick keys, approached the tec to negotiate an agreement with us for a joint approach to the international monetary fund ( imf ) for assistance. this was a difficult request since there were so many strategic and tactical questions to consider. an example in this regard was the question of whether the apartheid government was trying to lock us into an imf structural adjustment programme via the back door, thereby tying the hands of the future democratic government. the end result was that we agreed to that request by the then government to approach the imf for the required balance of payments support called the compensatory and contingency financing facility ( ccff ). there were no conditionalities attached since this was a soft loan as it were. however, we had to provide the imf with a “ statement on economic policy ”. the statement was fairly simple : assure the imf that the future government will pursue prudent macroeconomic policies. this was something that the anc in particular had adopted as an approach as early as 1992 in a document entitled - ready to govern. we did not sell out! however, this “ statement on economic policy ” has been described by some as the beginning of neo - liberal economic policies that were to be pursued