Thirdly, accommodative policy stances in some developed countries resulted in positive interest-rate differentials for emerging market countries compared with their counterparties within the industrialised countries. This is still the case with respect to South Africa despite the overall reduction of 600 basis points in the repo rate since June 2003.
Based on the highly responsible fiscal stance of the Government, a steady appreciation of the kina and the increase in the foreign exchange reserves ensured in late 2003 and early 2004. Then I asked the Bank of PNG staff and advisors to prepare for the liberalization of foreign exchange controls.