cent in january 2000. this increase in non - resident participation in the foreign exchange market could be explained by the decline in the number of foreign banks which provide rand liquidity in london and possibly also by increased trading in the rand. 6. conclusion notwithstanding the volatility in the exchange rate of the rand, we are convinced that there is every reason to be confident regarding the future path of the rand. with prudent fiscal and monetary policies in particular, and good economic policies in general, being in place, we are expecting the current relatively modest but sustainable economic growth to continue. in these circumstances the current account should be a positive factor with south african exports performing relatively well. inflation is coming down slowly but surely and, of importance to you, by no stretch of the imagination can the rand be regarded as overvalued. may i conclude by quoting a press release by the bank for international settlements : " maintaining price stability is the best contribution central banks can make to continued prosperity. " we reiterate our commitment to pursue the appropriate monetary policy to achieve the target range of 6 to 3 per cent in cpix ( mu ) on average in 2002. thank you.

; and possibly once - off inflows of a permanent nature as may accrue from the corporate sector. the exchange rate of the rand is far more of a two - way risk than many market participants realise. perhaps it would also be appropriate, having touched on the nofp issue, to reiterate the successful reduction in this position which has occurred over the past number of months. as at 31 december 1998, the nofp stood at us $ 22, 5 billion and it has steadily been reduced to a level of us $ 9, 0 billion as at 30 april 2001. this is, in our view, an important milestone in the implementation of our policy. the reasons mentioned above, and others, have culminated in higher volatility levels for the rand. in 1997 the average one - month historical volatility of the rand was 4, 5 per cent. it increased to an average of 12, 6 per cent in 1998 – having been around 35 per cent in the midst of the asian crisis – before decreasing to an average level around 9 per cent for 2000. for the current year to date, the average one - month historical volatility is 12, 3 per cent, much higher than in previous years. but as mentioned before, we are in good company. 4. the impact of currency volatility on monetary policy before turning to the impact of currency volatility on monetary policy, it is important that we spend a few minutes refreshing our memories about the recent economic developments in south africa. economic growth appears to have levelled off in the first three months of 2001, although activity has remained at a relatively high level. still, the creation of employment opportunities for south africa ’ s growing population remains the major challenge facing the country. south africa ’ s overall balance of payments position remained sound during the first quarter of 2001, with a further small surplus being recorded on the current account of the balance of payments and the value of the international reserves of the country rising slightly. the growth over 12 months in the broadly defined money supply ( m3 ) accelerated from 7, 5 per cent in december 2000 to 9, 4 per cent in february 2001 and further to 12, 8 per cent in march. the growth in bank credit extension also accelerated in the first quarter of 2001. continued discipline was maintained in the finances of the fiscus with expenditure only marginally exceeding the budgeted amount for fiscal 2000 / 2001 and revenue rising rapidly largely owing to improved administrative procedures. although the depre