have observed that the passthrough thus far has been far more muted than has been the case in previous episodes of currency weakness, possibly also a reflection of the weak state of the economy. we have to assess whether the pass - through remains as low as it has been, or will we reach a stage where the margins of importers can no longer be squeezed? furthermore, if there is a spike in inflation as a result of the depreciation, is it a one - off increase that will pass through the numbers by next year, or will it generate a depreciation - inflation spiral? most importantly, will inflation expectations remain relatively contained at current levels? these are not easy issues to determine with confidence, and have been complicated by the strong market reaction to the suggestion that the us fed may begin slowing the pace of its bond - buying programme. our core mandate remains price stability, so our primary objective is to keep inflation within the target range. currently our forecasts ( and those of nearly all private sector analysts ) suggest that inflation is likely to remain at the top of the band or slightly above, and then to return to within the target range. the downside risks to the growth outlook would suggest that we should tolerate inflation at these levels. however, the upside risks to the inflation outlook make further accommodation more difficult, but do not automatically imply a tightening of the monetary policy stance. this will be highly dependent on how we see the inflation trajectory unfolding in this very uncertain environment. in other words, it has become even more data dependent. there is of course always the danger that we are “ behind the curve ” and that we leave it too late ( and this we will only know ex post ). but at the same time, a sustained breach of the inflation target is not our central forecast, and the downside risks to growth imply that we would not want to be unnecessarily pre - emptive. this is the essence of the monetary policy dilemma, and requires a fine balancing act. as already mentioned, south africa ’ s high quality firms are a key source of strength for the south african economy. south africa is a vibrant, robust democracy with a sound constitution that protects the rights of all citizens. this is essential for long term economic growth and for the fruits of that growth to be shared more equitably. there are several other economic foundation - stones which will help us navigate through these difficult times. south africa ’ s macroeconomic policies are sound

of new legal provisions and amendments to the existing legal framework ( e. g. the law on credit institutions, the law on bank bankruptcy, and the law on the bnb ). strategic decisions need to be made on establishing relevant competent authorities tasked with the responsibility of resolving banks and investment firms, on setting up resolution funds, and on the drawing up by the supervised entities of adequate plans for recovery or controlled restoration of their viability by restructuring. in connection with the new eu capital framework crd4, in 2014 the bnb began to implement the new reporting framework for supervisory purposes ( the so - called finrep and corep ), consisting of over 100 separate reporting forms. the additional supervisory reporting will meet the accumulated information needs of the banking supervision department and will tackle the most sensitive sources of risk in banks ’ portfolios. in 2015 it is expected that the eu - wide banking supervision rules will become more and more common in banking practices. numerous technical standards, developed by the european banking authority ( eba ) and adopted by the european commission, are going to be put in place. in supervising the subsidiaries of euro area banks, the bnb is going to cooperate actively with the single supervisory mechanism ( ssm ) which started in november 2014. last but not least is the bnb ’ s intention to initiate an asset quality review of the entire banking system, which will cover all banks operating in bulgaria. this will also be a key requirement if the government should decide, at some point, to start talks with the ecb for joining the ssm. the methodology of this review will be based on the highest standards already developed and applied by the ecb in the recently completed asset quality review in the euro area largest banks prior to their transition to the ssm. this review will be carried out with the help of an independent external consultant. it should start not later than the end of next year, depending on how the implementation of the new bank recovery and resolution directive advances, including the creation of the respective resolution fund. i assure you that bis central bankers ’ speeches the bnb is going to get commercial banks familiar, at an early enough stage, with the main elements of the methodology of the forthcoming asset quality review, so that each bank could budget the relevant costs ( by analogy with the euro area where banks have borne the costs of their asset quality review ). dear friends, the passing 2014 will regrettably be remembered for the vicious public pressure on the bnb. the central bank