mr mboweni discusses e - money and its impact on the central bank ’ s operations address by mr tito mboweni, governor of the south african reserve bank, at the sun microsystems conference 1999, held in vodaworld, midrand on 11 october 1999. * 1. * * introduction electronic commerce, or e - commerce, is the catch - all phrase for many advances in technology centered on the internet and heralds fundamental changes for the world economy. the expansion of the internet on a global basis, has made it an ideal means to conduct commerce. in south africa, as in the rest of the world, the internet is being used more and more to advertise and sell goods and services. the internet has brought about a need not only for micro payments, e. g. a small payment of perhaps only a few cents for viewing a specific piece of information, but also growing interest in developing more reliable and secure methods of payment for large commercial transactions. e - commerce and, perhaps more important from the reserve bank ’ s point of view, electronic money will probably have significant implications for most persons and institutions. this evening, i would like to concentrate only on two aspects, namely a comparison between electronic payment methods and the current conventional payment instruments, such as currency and credit cards, and the possible effect that e - money may have on the operations of the reserve bank. 2. the development of e - commerce the internet, and its application to e - commerce is turning many industries inside out. some firms have tried to only partially adopt the new e - commerce technologies, but are increasingly realising the importance of making e - commerce a seamless, integral part of their business plans. south africa has begun to reach the stage where the previous wholesale financial markets structures are beginning to change as the internet spreads through them. retail investors, empowered by the web, are fast becoming much more proactive. certain financial institutions face the prospect of traditional revenue streams contracting or disappearing altogether as the internet brings transparency and efficiency to once closed areas. the financial world is taking e - commerce seriously, but no one knows exactly how or how quickly these new technologies will change the business landscape. however, one thing is certain – e - commerce will speed up the process of globalisation and will lay bare the weaknesses in any institution. central banks worldwide are considering their positions with regard to electronic commerce, internet banking and electronic money applications. there are a number of electronic money products which are either in the process of

, where elevated inflation has necessitated higher interest rates. while the domestic labour market also continues to recover gradually, an environment of weak growth implies that we may start seeing renewed job losses. furthermore, while nominal wages have shown a recovery, real incomes, however, remain constrained. nonetheless, we do expect household spending to remain supportive of the little growth that is projected for the year. this view is also corroborated by today's gdp report, which continued to show positive growth in household consumption. furthermore, although having moderated over recent quarters, growth in fixed investment showed some recovery in q4 and is also expected to contribute positively going into 2023. from this it is clear that the outlook for even the relatively low growth rates we project over the medium term, remains highly uncertain – in light of our own domestic constraints. the outlook also hinges on how quickly south africa's structural constraints can be addressed over the medium term. from an external accounts'perspective, south africa has benefitted from the generally high commodity prices that have prevailed over the past two years. these, however, have been moderating since the second half of 2022, in line with the slowdown in global growth, with further declines in south africa's commodity export prices expected in 2023. while the reopening of the chinese economy led to renewed strength for key commodities such as iron ore, platinum, copper and steel at the beginning of the year, this may not be sustained. the recovery in china's economy should mostly be led by services, while the commodity - intensive construction sector is unlikely to rebound at a fast pace. 3 / 5 bis - central bankers'speeches at the same time, the persistence of domestic electricity supply constraints implies that more businesses and households may be investing in alternative energy solutions, thereby driving up imports. this, balanced against projections of lower export volumes, equates to a deteriorated current account balance over the short to medium term. the role of the financial channel financial markets are another channel through which global conditions affect south africa. global growth, inflation and the pace of policy normalisation in advanced economies affect investor risk appetite, cross - border capital flows and, hence, the availability and cost of external funding. so far, considering the pace of policy normalisation in major economies and the extent to which'safe assets'have re - priced, the shock has not been strong by historical standards. capital outflows from emerging markets were moderate for most of 2022 and recovered in