The political transition in 1994 set the scene for normalisation of South Africa's financial ties with the rest of the world. From 1995 South Africa ran current account deficits but kept these contained at less than 2 per cent of GDP.
The deficits were easily financed through net capital inflows, which were sizeable enough not only to pay for the excess of imports over exports but also to build up South Africa's gold and foreign exchange holdings to a record level.