the accountability of the executive to parliament, the transformation of public finance management, the independence and competence of the judiciary, the independence and mandate of the sarb – all come from the constitution. page 2 of 4 this is a happy occasion for the sarb as it marks the culmination of a project that started last year with the south african mint, in which we capture some of the essential elements of our constitution in coins. we honour the vision of the architects of our constitution with the new sa25 commemorative circulation and collectable coins that the sarb is launching here today. the team at the south african mint tapped into the perspectives of young south africans and the creativity of various artists for the themes and designs of the sa25 ‘ celebrating south africa ’ coins. it is, in fact, the first time in the history of the sarb and the south african mint that south africans were consulted to this extent in developing coin themes and designs. i am told that, during the engagement with young south africans, ‘ our constitutional rights ’ came up several times, which made this the overarching theme that we decided to depict on the coins. these perspectives were brought to life by some of the country ’ s most talented young artists who not only poured passion into the project but also captured the essence of the theme. one of the main functions of the sarb is to ensure there is a sufficient supply of high - quality banknotes and coins. this is the one function of the sarb that puts it in the pockets and wallets of all south africans. it is only fitting that the money we use reflects the identity of our country. it is also the responsibility of the sarb to ensure the integrity of the banknotes and coins in circulation. we have to ensure that banknotes and coins remain a secure method of payment, a unit of account, and a store of wealth. let me repeat : a banknote is but a piece of paper, and a coin is but a piece of metal. both derive their worth from the trust that the citizens page 3 of 4 of a country have in the country ’ s currency. the confidence that south africans have in their banknotes and coins is based on trust that the banknotes and coins are authentic, and trust in the institution that issues them. working on this project, and in fulfilling our constitutional mandate, we at the sarb and all our subsidiaries continue to be inspired by the constitution and strive to ensure that we continue to function in the public

the rate at which the banks borrow from us, and this in turn affects other interest rates in the economy. it could be seen as somewhat ironical that in order to protect the consumer from inflation, the means to achieve this are likely to impact negatively on consumers through higher interest rates. unfortunately, on the part of the bank there is no way to avoid this. at times, the increase in interest rates to keep inflationary pressures in check has drawn some criticism particularly by borrowers who were not expecting such increases. i should note however, that depositors or savers are happy when interest rates increase. perhaps more publicity is given to the plight of those who are negatively affected by interest rate changes. it should be emphasised that the bank acts in the interest of all consumers, irrespective of whether they are borrowers or depositors, by setting interest rates at an appropriate level to ensure that the inflation target is achieved. low inflation allows for generally lower nominal interest rates. furthermore, as the bank builds up credibility for its inflation - fighting policies, interest rate cycles are likely to have a lower amplitude. hopefully the strong interest rate cycles we have seen in the 1980s and 1990s are a thing of the past. by achieving sustained low inflation, we believe that interest rate adjustments can be more moderate and more certainty will result for both consumers and producers. ultimately we would like to achieve a virtuous circle of low inflation, moderate interest rate cycles and high and sustained economic growth. at times it is possible that the actions of consumers could threaten the inflation target, and it our responsibility to take appropriate action. in the past three years we have seen household consumption expenditure increasing to extremely high levels. credit extension by banks has been rising at very high rates, and household indebtedness has also increased to record highs. some of this can be explained by a number of positive developments in the economy apart from lower interest rates. these include stronger household balance sheets, higher real incomes and increased employment. our monetary policy actions in the second half of last year were in part an attempt to dampen the inflationary potential of this higher consumption expenditure. there are other dangers emanating from excessive borrowing, particularly when interest rates start to rise and consumers find themselves overcommitted. in accepting credit, consumers should understand their rights and not fall prey to aggressive marketing of credit. for this reason we are gratified that the banks have adopted a code of good conduct in the marketing of credit. the national