s current account deficit. but much depends on whether higher tariff barriers are realised and on how capital markets assess us fiscal policy. if a larger us fiscal deficit does not generate strong growth, then higher financing costs could weigh quite heavily on the global economy. this combination, weak global growth, higher rates and risk premia is where we are already coming from. it is the set of conditions that we hoped we were exiting from this year, and should, therefore, in mitigation spur us on to work harder to reduce our macroeconomic risk profile and take steps to encourage more rapid economic growth here at home. today, i ’ d like to discuss the outlook for recovery and the role of monetary policy. this is necessarily uncertain. it is easy to imagine shocks which could throw us off course, both from the global economy and domestically. some important political shocks have recently occurred, and it will take time for their full economic meaning and impact to be felt – a point i will return to in the conclusion. yet our policy thinking can ’ t simply be about waiting for new information and complaining about uncertainty. being data dependent is sensible in as much as you should revise your strategy in line with new facts, but it is not a substitute for strategy. as former us treasury secretary tim geithner reminded us during the crisis, ‘ plan beats no plan ’. inflation i will start with inflation, because it is our primary mandate, and because it is important for the economy ’ s overall trajectory. as you will all know, inflation has been outside the 3 - 6 % target range for much of this year. it is currently expected to return to within the target sometime in the second quarter of next year. the main drivers of the breach have been higher food prices and pass - through from currency depreciation. apart from these shocks, however, inflation would still have been quite elevated for an economy with almost no growth. this is because wage and salary settlements continue to come in above inflation and productivity gains, and because some administered prices like electricity are still being adjusted higher in real terms. the policy response to this set of challenges has been nuanced. we are flexible inflation targeters, which means we are mindful of the origins of shocks as well as the broader economic consequences of our decisions. administered prices and food prices are classic supply shocks, and we think of short term volatility in the exchange rate the same way. this means we prefer to focus on the so - called second round

are a lasting reminder of the city ’ s origins. this city is appropriately called egoli, nguni for gold. the gold rush shantytowns that sprang up were transformed into a modern concrete city, johannesburg, and the economic boom engulfed the entire country. the revenue generated from gold has enabled the country to develop its impressive industrial, commercial and financial strength. today johannesburg is a modern city in every sense – tall skyscrapers, a complex network of freeways, a bustling metropolis of industry and commerce and a hub to which people are drawn. according to the human sciences research council, the city of johannesburg has a population which is conservatively estimated to be over three million. 3. a world - class financial centre the discovery of gold led to the establishment of many mining and financial companies, leading to the development of a stock exchange. on november 8, 1887, the johannesburg stock exchange was established and trading was moved around the city several times as the trading halls became too small to accommodate the amount of trading and number of traders. in 1978 the stock exchange moved to the historic diagonal street, before leaving the city centre for its current location in sandton in 2000. the jse limited is the largest stock exchange in africa and is ranked among the top 20 major equity exchanges in the world. at the end of 2006, the jse had a market capitalisation of r5, 7 trillion, with 388 companies listed on the exchange. turnover on the jse has shown strong growth over recent years, increasing from an annual turnover of r1 279 billion in 2005 to r2 100 billion in 2006. one is encouraged to learn of plans by the jse limited to construct a pan - african exchange which will initially allow investors to trade in shares from ghana, namibia and zambia, and later develop to cover the rest of africa. these are bold steps towards making johannesburg a financial centre for the continent. the bond exchange of south africa ( besa ) also resides in this great city. as at 31 december 2006, besa had granted a listing to 725 debt securities, issued by 91 borrowers, with a total nominal value of r725 billion – equal to just over 47 per cent of gross domestic product ( gdp ). government bonds comprise around 60 per cent of the bonds listed on besa, with the rest consisting of bonds issued by parastatals and corporates. corporate bond issuances are currently increasing at a much faster rate than government bond issuances.