daniel mminele : south african monetary policy in the context of central banking developments abroad address by mr daniel mminele, deputy governor of the south african reserve bank, at the tradition dinner, johannesburg, 28 november 2012. * 1. * * introduction good evening and thank you to tradition south africa for the kind invitation to speak to you this evening. i have been asked to talk about south african monetary policy in the context of the influences from monetary policy globally. monetary policy has evolved in leaps and bounds over the past few years and unconventional measures, in particular, quantitative easing ( qe ), has become a fundamental part of monetary policy around the world. japan, known as the pioneer of qe, unfortunately has not had much success with this policy, failing to boost either growth or inflation despite very accommodative monetary policy. there are many views about japan ’ s so - called lost decades and why it is different for the us and others, and how the speed, vigour and manner in which qe applied can make a difference. japan ’ s experience is translated into what is happening in the us and elsewhere, and doubts are raised about the appropriateness and success of such unconventional measures. it is too early to draw any definitive conclusions, but no doubt in time economic textbooks will be full of evidence of the success or otherwise of qe. i will start my remarks off by firstly looking at countercyclical monetary policy, in particular as it pertains to emerging market economies, and the spill - over effects of monetary policies abroad. i will end my remarks by talking about the more recent developments pertaining to south africa, with reference to the monetary policy committee meeting held last week. 2. counter - cyclical monetary policy and spillovers monetary policy in advanced economies has undergone a drastic makeover since the 2008 – 2009 crisis, from the implementation of unconventional policies, to forward guidance being provided, and increasingly talk of moving towards specific numerical measures to which monetary policy tightening should be tied. the so called “ 7 / 3 threshold rule ” 1 has often been bandied about as an alternative to the explicit forward guidance provided thus far by the federal reserve bank. under such a rule, the federal open market committee ( fomc ) may indicate that it will maintain the fed funds rate at current levels until such time as unemployment moves below 7 per cent or inflation above 3 per cent, at which point, the federal funds rate may be raised. alongside such unconventional policies in

philipp m hildebrand : economic outlook and monetary policy speech by mr philipp m hildebrand, member of the governing board of the swiss national bank, aperitif marche monetaire, geneva, 17 november 2005. the complete speech can be found in french on the swiss national bank ’ s website ( www. snb. ch ). * * * the swiss economy has benefited from a favourable international environment. activity has remained strong in the us, whereas it has improved in japan and, more recently, in europe. in switzerland also, the latest indicators point towards stronger growth. exports remain the engine of the recovery but private consumption has also picked up. however, consumer confidence remains fragile in the context of only modestly improving labour market conditions. the snb expects the economic recovery to continue. a sudden adjustment of the us current account imbalance or a further increase of energy prices are predominant risks. from a monetary point of view, the current situation is characterised by different counteracting forces. on the one hand, the economic outlook is positive. on the other hand, some risks put this favourable picture into perspective. furthermore, the increase of energy prices might endanger medium term price stability at a time when monetary conditions remain expansive. last but not least, globalisation continues to hold down the prices of many goods. in this complex environment, it is important that central banks succeed in preserving their most important monetary asset, namely well anchored inflation expectations. in switzerland, this means that as long as the economic recovery remains on track, we should not postpone for too long the process of normalising monetary conditions. otherwise, we would put medium term price stability at risk. 1 / 1