As far as the Bank’s policy on foreign exchange is concerned, it is hoped that the more favourable conditions now experienced in the market will continue throughout 1997, and will enable us to pursue the longer-term objectives of: building up the total foreign reserves to a more comfortable level; reducing the Reserve Bank’s role in the forward foreign exchange market; and gradually phasing out the remaining exchange controls.
To the extent that these three objectives provide conflicts within themselves, important policy decisions will have to be taken between the Bank and the Minister of Finance on the relative importance that should be attached to each one of the objectives in an appropriate policy matrix.