cannot be complacent. there is ongoing work to strengthen the regulatory architecture with a move towards a twin peaks model of financial regulation. this approach will see the consolidation of all prudential regulation of financial institutions within the bank, while market conduct regulation of the financial sector will be consolidated within the financial services board. in conclusion, significant advances have been made over the past 18 years in alleviating poverty in south africa by providing essential services to the poor and through an improved social security system. according to the recent census, marked improvements have been made, for example, with respect to the provision of housing, water and electricity with 85 per cent of south africa ’ s population now having access to electricity, while 78 of our citizens now live in formal housing. the oecd ’ s survey of south africa 2013 – released earlier this week – characterises south africa as progressing, with good institutions and generally favourable momentum in important areas. however it also recognises sluggish economic growth coupled with rising inflation and an entrenched structural unemployment and inequality challenge. south africa is an extraordinary country of great contrasts. the atlantic and indian oceans meet at the most southerly tip of the continent. the cold water current of the atlantic and the warm water current of the indian oceans perhaps reflect the contrasts that epitomise our country : a country of great wealth and extreme poverty ; of gold, diamonds, platinum and other mineral wealth that has contributed to the wealth of many nations ; a country where the first heart transplant was performed, whose skills and expertise lead many fields of science, space, finance, business and the search for global and regional peace. it is a vibrant country full of hope and promise, but a country that has to rebuild its values in keeping with a constitution that entrenches democratic principles and respect for human life and dignity. the economy needs to grow faster and more inclusively, taking account of regional and continental opportunities. this is what we are committed to, and success will be in all of our interests as together we seek ways to break the stranglehold that the prevailing global crisis has on many parts of the world. thank you. bis central bankers ’ speeches

to the value of r3 billion. while bond inflows also declined in the last two months of 2012, both bond and equity inflows have resumed on a moderate scale, and totaled r18 billion in the first two months of this year. non - resident investors now hold 36 per cent of south african government bonds, up from 13 per cent in 2008. in response to these inflows, the rand appreciated by almost 30 per cent against the us dollar between the beginning of 2009 and march 2012, although around a volatile trend. for much of the period, the rand moved in line with other liquid emerging market currencies, particularly the mexican peso and the brazilian real. these currencies were highly sensitive to the so - called “ risk - on ” and “ risk - off ” scenarios, particularly relating to risk perceptions of bis central bankers ’ speeches the eurozone. this co - movement in effect indicated that the underlying movements of the rand were determined to a large degree by external rather than internal factors. since april 2012, however, domestic factors have come more to the fore. the rand has decoupled from its emerging market counterparts and has depreciated by about 15 per cent against the us dollar and by a similar amount against the mexican peso. the rand initially depreciated in response to the widening of the deficit on the current account of the balance of payments but depreciated further largely as a result of a rising risk premium, following protracted labour disputes in the mining and agricultural sectors in particular, as well as downgrades by the three main ratings agencies. while the depreciation should help to reduce the current account deficit, the adjustment will not be easy given the slow or negative growth in the advanced economies. the deficit is expected to persist for some time, although at a narrower, more sustainable level in the face of the import - intensive nature of south africa ’ s infrastructural investment expenditure. such expenditure is seen as growth enhancing, and therefore sustainable on an inter - temporal basis. the underlying reasons for capital flows to emerging markets remain, and are likely to persist for some time. furthermore, with increased certainty about the domestic policy framework, the risk premium is expected to decline. however, as financial markets are highly sensitive to changing developments, sentiment can change very quickly, and so too the direction and quantum of flows as can be seen from the financial markets ’ reaction to the recent fomc minutes that were