While it may appear that in the past months there has been minimal reserve accumulation, our overall reserves are reported in dollars, and the recent weakening of the euro and sterling have resulted in significant valuation changes which have, at times, dwarfed the net accumulation. The SARB has continued to build reserves as and when this has been appropriate.
As a consequence, each central bank is well advised to react to foreign developments only if these become relevant for domestic price stability. I therefore fully agree with John Taylor’s conclusion that central banks should not mechanically follow other central banks’ policy decisions.