The net oversold forward book of the Reserve Bank, about which there is much misunderstanding in financial markets, declined from US $ billion at the end of 1996 to less than $ billion at this stage. The second gratifying development was that South Africa succeeded in 1997 to arrest the inflationary pressures created by the 1996 depreciation of the rand.
The rate of increase in consumer prices, measured over a twelve months’ period, accelerated from 5.5 per cent in April 1996 to 9.9 per cent in April 1997. During the rest of last year, however, the rate of increase in consumer prices gradually drifted down to 6.1 per cent in December 1997.