At the same time, net gold exports declined by 8 per cent per year. The current account of the balance of payments therefore switched from a surplus of R6 billion in 1993 to deficits of R1.2 billion in 1994 and R10.2 billion in 1995. During the second quarter of 1996, the seasonally adjusted annualised rate of the current account deficit increased to R13 billion.
With a low level of foreign reserves and a process of gradually removing exchange controls, South Africa became very dependent on a continuous large BIS Review 107/1997  -3-  capital inflow from the rest of the world. When this capital inflow disappeared in the second quarter of 1996, a painful downward adjustment in the economy became inevitable.