Nothing changed in the South African domestic situation in May 1998 to justify the sudden switch-around in the non-resident capital inflows to outflows from the South African Bond Exchange. The adverse conditions in world financial markets continued into the fourth quarter of last year.
But despite this volatility, we continue to project that core inflation will be a bit above 1.5 per cent for the second half of 2004, before gradually moving up to the 2 per cent target in 2005. Looking forward, we will need to continue to reduce monetary stimulus to avoid a buildup of inflationary pressures and to contribute to sustainable, solid economic growth.