statements had to be circumspect without ever inducing a sense of panic. for nobody would have been prepared to say to all and sundry : “ we don ’ t have sufficient reserves, but are still going to attempt to influence the exchange rate, so there! … ” any student of this period in the economic history of the country will be struck by the subtle nature of the communications of this time. consider, for example, the difference between the reporting of developments regarding reserves in the quarterly bulletin of the sarb. the march 1996 report reads as follows in the section on foreign reserves : “ south africa ’ s total gross gold and other foreign reserves rose from r14, 1 billion at the end of 1994 to r15, 2 billion at the end of september 1995 and to r18, 2 billion at the end of december 1995. after having increased by r2, 2 billion in december 1995, the gross foreign reserves of the reserve bank decreased by r229 million in january 1996. without taking into account the credit facilities of the monetary authority, the total foreign reserves of the country were equal to seven weeks ’ imports of goods and services at the end of december 1995. ” billions deflected by casual reference to a few millions : weeks of imports, not months ; some numbers refer to the country ; others to the reserve bank ; others still to the monetary authority. all in rand, not in sdr or dollar values. and these numbers, of course, do not include the credit facilities of the monetary authority, which, if included? draw your own inference and rest assured that we are not panicking. this may be contrasted with the confident tone of the most recent quarterly bulletin ( march 2008 ) which reports on international reserves and liquidity in the following manner : measured in us dollar, the value of the gross gold and other foreign reserves of the south african reserve bank ( the bank ) increased from us $ 30, 5 billion at the end of september to us $ 33, 0 billion at the end of december 2007 and further to us $ 34, 2 billion at the end of february 2008. the bank ’ s international liquidity position increased from us $ 28, 4 billion at the end of september 2007 to us $ 31, 3 billion at the end of december and further to us $ 32, 7 billion at the end of february 2008. ” straight, to the point and, to use the current idiom of some of the young, together! at least two

however, as mminele ( 2007 ) notes, because the level of its gross reserves were fairly low, averaging around usd3, 8 billion between 1990 and the end of 1997, the bank funded its intervention through the forward market, and in the process built up an oversold forward book which, at tits highest level in 1995, amounted to usd29 billion. this exceeded the level of net reserves by a considerable margin, leaving a negative net open foreign currency position ( nofp ) which reached a peak of usd23, 2 billion in august 1998 ; a number which is still mentioned only in hushed tones by those reserve bank staff who can recall those momentous times! in 1998, the sarb ceased its intervention in the foreign exchange market, abandoned its attempts to influence the level of the exchange rate and, in addition, made a public commitment to eliminate the negative nofp and to close out the oversold forward book. and this had the desired result. in september 1998, the level of gross reserves, at us $ 5, 3 billion was still very small in absolute terms and relative to the net oversold forward book of approximately us $ 18 billion. by may 2003, the nofp was marginally positive ; but by february 2004, the positions in the oversold forward book were balanced and gross reserves had started to increase. at the time of writing, the template on international reserves and foreign currency liquidity, which is available to all who may be interested at www. reservebank. co. za, indicates that the approximate market value of the official reserve assets as at end of march 2008 was us $ 34, 384 billion. chart 1, beloved of those sarb directors and staff who speak in public, illustrates these developments. in summary, then : the sarb now has reserves to manage. this was not always the case, for during some periods prior to 1998 what needed to be managed were negative net reserves. second, the sarb has made a public commitment not to participate in the market for foreign exchange in an attempt to influence or to determine the nominal exchange rate. third, exchange controls have been liberalised significantly. south africa does not appear now to be too different from its peers among emerging market economies. 2. 2 how? the implications for communication of the afore - going narration were and remain challenging. in a situation of economic vulnerability, such as characterised south africa at various moments in its past, the need was for the bank to maintain a sense of calm.