The objectives of monetary policy at the beginning of the 1990s were to reduce the rate of inflation to the average rate of inflation in trading partner and competitor countries; to manage the money creation process in such a way that an adequate, but not an excessive amount of new money would be supplied to the system; to maintain positive real interest rates; to increase the gold and other foreign reserves to a comfortable level and to develop a sound financial infrastructure consisting of healthy financial institutions and financial markets.
This was a reasonable approach in the circumstances, but the achievement of these goals was hampered by the overall political and economic environment. In the 1990s the SA Reserve Bank also intervened heavily on its own initiative in the spot and forward market to influence supply and demand in the foreign exchange market.