. reserve bank statistics show that total portfolio inflows reversed from r85 billion in 2012 to an outflow of r55, 5 billion in 2014, comprising r13, 4 billion equity inflows and r68, 9 billion bond outflows. more recent data from the central securities depository 3 reveal that, in the first half of 2015 to date, non - residents bought r19, 0 billion worth of equities but sold r1, 6 billion worth of bonds, amounting to total inflows of r17, 4 billion. south africa ’ s vulnerability to us policy tightening is augmented by our dependence on external financing to deal with the current - account deficit. it is well known that south african bonds – and those of countries such as brazil, india, and mexico – have a strong correlation with us treasuries. this correlation was clearly evident during the “ taper tantrum ” when the 10 - year us treasury yield increased from 1, 63 to almost 3, 0 per cent and the south african 10 - year benchmark bond increased from 6, 58 to almost 8, 0 per cent between may and august 2013. in 2014, south african bond yields also adjusted ( downwards ) in line with us treasuries despite various negative domestic developments, including rating downgrades and the deprecation of the rand, which under normal conditions would have driven yields higher. as the us policy rate hike was believed strate data. bis central bankers ’ speeches to be getting closer, the persistent strength of the us labour market, as reflected by the closely watched non - farm payrolls data, drove us treasury yields significantly higher. over the past four months, 10 - year us treasury yields have increased by approximately 75 bps, which is quite large given the current soft us economic backdrop. this was mirrored by a 140 bps increase in the comparable r186 domestic bond yield. the importance of the us interest - rate cycle for south africa is also apparent in terms of funding costs for both the sovereign and domestic corporates. with reference to the former, the external funding costs – as reflected by jp morgan ’ s emerging market bond index ( or embi ) – the spread for south africa over us treasuries has increased to 216 bps due to domestic factors but also in anticipation of us tightening, from 170 bps a year ago. the funding costs for domestic banks have, on the other hand, been negatively influenced by a further dynamic

time and costs by learning from the pioneer ’ s experience and following in their footsteps where they took the right path. in addition, because followers leapfrog some steps in the course of economic development, they can achieve compressed growth and develop faster than the vanguard. in this respect, as korea is presently ahead of nepal in economic development, i think that we are in a fortunate position to give a lot of help. if you wish, the bank of korea will be happy to further expand our cooperation and friendship with the nepal rastra bank. closing remarks thanks to advances in it technology and transport, nepal and korea are now closer together than before. many korean trekkers visit nepal every year and thousands of nepalese are working in korea. besides this, nowadays, pashimina shawls woven in nepal are becoming very popular in korea. it is my profound hope that this workshop will offer a useful opportunity to deepen still further the excellent relationship between nepal and korea and to help nepal ’ s economic development and financial reform. thank you for your listening so attentively.