And with this in mind, we must be vigilant. In this environment, commodity prices, upon which so many developing countries depend, are expected to weaken. Indeed, the IMF notes, that prospects in these developing markets, like South Africa, depend on maintaining investor confidence. However, the IMF acknowledges that these markets have made significant progress in reducing their external and financial sector weaknesses.
Many of them have moved towards sustainable exchange rate regimes and prudent debt and reserve management policies. Against this backdrop of slowing world economic activity, the Reserve Bank’s composite leading business cycle indicator regained some momentum in the three months ending February. Similarly the composite coincident business cycle indicator was on a definite upward trend from May 2000 to February 2001.